My post earlier this week, Are Insurance Agents McDonald’s Order Takers or Professional Advisors? The Massachusetts View, created some buzz. So, I have decided to follow up with insurance agent law in South Carolina where they are having their presidential primary vote today. If a Northern state like Massachusetts follows the “order taker” view, do you have a guess whether a state way down in Dixie will follow the same reasoning?

Yankees and Southerners finally see eye to eye. South Carolina is an “order taker” state:

Generally, an insurer and its agents owe no duty to advise an insured….If the agent, nevertheless, undertakes to advise the insured, he must exercise due care in giving advice….An insurer may assume a duty to advise an insured in one of two ways: (1) he may expressly undertake to advise the insured; or (2) he may impliedly undertake to advise the insured…It is the insured, however, who bears the burden of proving the undertaking.

An implied undertaking may be shown if: (1) the agent received consideration beyond a mere payment of the premium, Nowell v. Dawn– Leavitt Agency, Inc., supra; (2) the insured made a clear request for advice, see Precision Castparts Corp. v. Johnson & Higgins of Oregon, Inc., supra; or (3) there is a course of dealing over an extended period of time which would put an objectively reasonable insurance agent on notice that his advice is being sought and relied on…

It was incumbent on [the insured] to prove [the agent] agreed to advise him about his insurance needs. Courts cannot create contracts for the parties. There must be a clear oral or written agreement for a court to enforce. [The insured] may not seek, after the fact, to have a court or jury create an undertaking favorable to him, if the parties themselves did not enter such an agreement.1

This should not come as a surprise to students of insurance agent law. Aaron M. Simon noted in his 50 State Insurance Agent Standard of Care Analysis, that “order taker standard [is] generally applied in most jurisdictions.”

Thought For The Day

Nobody will ever deprive the American people of the right to vote except the American people themselves and the only way they could do this is by not voting.
—Franklin D. Roosevelt
1 Trotter v. State Farm Mut. Auto. Ins. Co., 297 S.C. 465, 471–72, 377 S.E.2d 343, 347–48 (Ct. App. 1988).