South Carolina Motor Club Bond: A Comprehensive Guide
August 23, 2022
This guide provides information for insurance agents to help their customers obtain a South Carolina Motor Club Bond
At a Glance:
- Average Cost: Between $100 to $750 per year based on the applicant’s credit
- Bond Amount: $50,000
- Who Needs it: All motor clubs operating in South Carolina
- Purpose: To ensure club members will receive compensation for any damages should the motor club breaches any member contracts
- Who Regulates Motor Clubs in South Carolina: The South Carolina Department of Consumer Affairs
South Carolina Statute 39-61-70 requires all motor clubs operating in the state to obtain a certificate of authority (COA) from the Department of Consumer Affairs. The South Carolina legislature enacted the COA requirement to ensure that motor clubs engage in ethical business practices. To provide financial security for the enforcement of the licensing law, motor clubs must purchase and maintain a $50,000 surety bond to be eligible for a COA.
What is the Purpose of the South Carolina Motor Club Bond?
South Carolina requires motor clubs to purchase a surety bond as part of the application process to obtain a COA. The bond ensures that club members will receive compensation for financial harm if the motor club fails to abide by the regulations outlined in South Carolina Statute 39-61-30. Specifically, the bond protects the club members if the motor club engages in any acts of fraud or breaches any contracts made with members. In short, the bond is a type of insurance that protects club members if the motor club violates the terms of its COA.
How Can an Insurance Agent Obtain a South Carolina Motor Club Surety Bond?
BondExchange makes obtaining a South Carolina Motor Club bond easy. Simply login to your account and use our keyword search to find the “Motor Club” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the South Carolina Motor Club Bond?
Surety companies will run a credit check on the owners of the motor club to determine eligibility and pricing for the South Carolina Motor Club bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the South Carolina Motor Club Bond Cost?
The South Carolina Motor Club Bond can cost anywhere between $100 to $750 per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the cost of the $50,000 bond requirement.
$50,000 Motor Club Bond Cost
|Credit Score||Bond Cost (1 year)|
|625 – 799||$150|
|575 – 624||$375|
|550 – 574||$500|
|500 – 549||$750|
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
Who is Required to Purchase the Bond?
South Carolina requires motor clubs to purchase a surety bond as a prerequisite to obtaining a COA. To paraphrase South Carolina Statute 39-61-20, a motor club is an organization that provides paying members with one or more of the following services:
- Bail and arrest bond
- Emergency road
- Claim adjustment
- Emergency travel expense
- Community traffic safety
- Merchandise and discount
- Travel information
- Guaranteed hotel/motel rates
- New car pricing
- Check cashing
- Personal property registration
- Credit card
Companies that enter into a service contract with a licensed motor club are exempt from this definition.
How do South Carolina Motor Clubs Apply for a Certificate of Authority?
Motor Clubs in South Carolina must navigate several steps to obtain a COA. Below are the general guidelines, but applicants should refer to the application form for details on the process.
License Period – All South Carolina Motor Club COAs expire on October 31 of each year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
All South Carolina Motor Clubs must purchase and maintain a $50,000 surety bond
Step 2 – Complete the Application
- $500 application fee
- Company formation documents
- South Carolina Certificate of Existence
- Financial statements certified by two of the club’s principal officers
- Business plan
- Membership application
- Membership certificate and member identification card
- Individuals insurance policy or group certificate
- Service contracts.
How do South Carolina Motor Clubs Renew Their Certificates of Authority?
What are the Insurance Requirements for Motor Clubs in South Carolina?
South Carolina does not require motor clubs to obtain any form of liability insurance as a prerequisite to obtaining a COA. Motor clubs must purchase and maintain a $50,000 surety bond.
How Do South Carolina Motor Clubs File Their Bonds?
Motor clubs should mail their completed bond forms, including the power of attorney, to the following address:
South Carolina Department of Consumer Affairs
293 Greystone Boulevard, Ste. 400
Columbia, SC 29210
The surety bond requires signatures, including witness signatures from the surety company and from a representative of the motor club. The surety company should include the following information on the bond form:
- Legal name and address of the entity/individual(s) buying the bond
- Surety company’s name and address
- Date the bond is signed
What Can South Carolina Motor Clubs do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, motor clubs in South Carolina must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Do not breach any member contracts
- Provide all services that have been paid for
What Other Insurance Products Can Agents Offer Motor Clubs in South Carolina?
Most reputable motor clubs will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for South Carolina Motor Club Customers?
South Carolina convienently provides a public database of active motor clubs in the state. We suggest contacting the Department of Insurance to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.