When Laura Phillips got her most recent car insurance bill, she immediately noticed something different.
"I always check my bills. I'm particular that way. I look at everything," she says.
It was a line listed below her premium that said, "SC Highway department fund .... $2."
There is no South Carolina Highway Department. It changed its name to the South Carolina Department of Transportation years ago.
She says, "When I checked back my files for the last year, my insurance, it just started showing up in April. And I thought, what is this?"
She called her insurance company, Allstate, which could tell her only that it was a fee the state required it to charge and the fee was sent to the state.
"To me, $2, it might as well be $200, because in this economy I want to know where every penny goes," she says. "And if they're going to charge everybody who drives, why aren't they fixing our roads?"
After checking with the South Carolina Department of Insurance, the South Carolina Insurance News Service, the Department of Motor Vehicles and the Department of Public Safety, here's what we found out:
The $2 fee does not go to the "highway department"; it's actually the state's "Uninsured Motorist Fund." Of that fee, 80 cents goes to the DMV to run its Automated Liability Insurance Reporting system (ALIR).
That system connects the DMV to all the car insurance companies in the state. When drivers cancel their insurance or let it lapse, the companies notify the DMV. If the drivers don't prove they have insurance within a certain amount of time, the DMV then notifies the state Department of Public Safety, which gets the other $1.20 of each $2 fee.
DPS has an Insurance Enforcement Unit, made up of 31 retired state troopers. Even though they're retired, they still wear the uniform and drive patrol cars. When they're notified that a driver does not have car insurance, they confiscate the driver's license and tag.
Russ Dubisky, executive director of the South Carolina Insurance News Service, says state law does not require insurance companies to list the fee on their bills, so some do and some don't. The reason some might not list it separately is because this is not supposed to be $2 on top of what drivers already pay for uninsured motorist coverage.
"This is not an additional fee," he says. "This is $2 that is being taken from your premium that is going to a designated cause, which is the collection of license tags for people that are driving without insurance."
He says the industry estimates about 7 percent of drivers in South Carolina are driving around without insurance.
It is legal to drive in the state without car insurance, but only by paying a $550 waiver fee. Dubisky says that option is not available to drivers with DUIs or other serious offenses, so for most drivers it's cheaper to buy liability coverage than to pay the $550 waiver.