South Dakota Car Insurance Laws & State Minimum Coverage Limits

South Dakota car insurance laws require minimum liability rates of 25/50/25 for bodily injury and property damage coverage. In South Dakota, drivers are required by law to provide proof of financial responsibility at a traffic stop or at the scene of an accident.

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

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Written by Eric Stauffer
Founder & Former Insurance Agent Eric Stauffer

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Mar 10, 2022

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South Dakota State Flag

South Dakota law requires car insurance on all vehicles in order to protect drivers, on both sides of an accident, from the financial costs of injuries and damage. These financial responsibility laws ensure that an at-fault driver can cover the cost of damage done, and that those who are not at fault will receive compensation. South Dakota law requires two types of coverage: liability and uninsured/underinsured motorist coverage.

Mandatory Coverage

The law in South Dakota mandates minimum limits for car insurance coverage. While drivers can choose higher limits, every policy must provide at least the minimum.

A basic car insurance policy must include:

  • Bodily Injury Liability insurance in the amount of $25,000 coverage per person injured in an accident and $50,000 per accident for all people injured. This coverage pays for medical costs on behalf of the at-fault driver for anyone injured as a result of the accident.
  • Property Damage Liability coverage in the amount of $25,000 to pay for damage to another person’s vehicle or any other property damaged as a result of an accident.
  • Uninsured/Underinsured Motorist Bodily Injury coverage with limits matching the minimums for Bodily Injury Liability, to pay for injuries in an accident where the at-fault driver has no insurance or does not have enough insurance to cover all of the injuries. This coverage also pays for injuries in a hit-and-run accident where the liable driver can’t be located.

While these are the legal minimums, many drivers select higher limits in order to protect themselves from the potentially high costs of a serious accident. Currently, a $25,000 liability per person coverage plan is unlikely to cover all costs for the medical bills associated with that accident. Minimum requirements are usually too low for the average cost of injury and loss from an accident. While you might prefer to keep your cost of insurance as low as possible, consider what hassles you might avoid down the road by increasing your policy limits and carrying more comprehensive insurance coverage.

South Dakota also allows drivers to provide financial responsibility in the form of a surety bond of a Certificate of Deposit in the amount of $50,000.

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Optional Coverage

South Dakota drivers can choose to purchase extra coverage to pay for other expenses related to a loss or damage in accidents and other situations. Upgrading the liability limits of the policy is just one of the available options for more coverage.

Additional coverage options are:

  • Collision coverage, which pays for damage to your vehicle in the event of an at-fault accident as well as for damage done by a hit-and-run driver. This coverage usually includes a deductible that the insured must pay before benefits will kick in.
  • Comprehensive coverage, which will pay for loss or damage in incidents that are not collisions. This coverage includes things like theft, vandalism, and fire, and will also provide glass-only coverage for chipped or cracked auto glass. This coverage also usually includes a deductible.
  • Increased Uninsured/Underinsured Motorist coverage, which is generally increased to match the liability limits of the policy.
  • Medical Payments coverage to pay for injuries or death for the driver or passengers in the vehicle.
  • Rental Reimbursement, which will pay for a rental car during a covered claim
  • Towing & Labor, which pays for towing and other roadside assistance needs in a non-collision situation.

Car insurance companies in South Dakota offer a range of other optional add-ons that can enhance policy protection, although options vary from company to company. Many companies offer coverage policies that include their most popular options as a convenient upgrade.

Insurance Proof and the Law

In South Dakota, drivers are required by law to provide proof of financial responsibility at a traffic stop or at the scene of an accident. Failure to do so will result in legal action against the driver.

Penalties for failure carry insurance in South Dakota are:

  • Fines of up to $100 or up to 30 days in jail
  • Driver license suspension for between 30 days and one year
  • Requirement to file proof of financial responsibility in the form of an SR-22

The SR-22 is a form filed by the insurance company indicating that the driver has the required insurance policy in force. Should the driver fail to provide this, or have the insurance canceled or lapsed, the penalty is a suspension of vehicle registration, plates, and driver’s license.

If your license is suspended for driving uninsured, there is also a reinstatement fee of $50-$200, in addition to other possible requirements including a new driving test.

Buying Car Insurance in South Dakota

According to a 2017 study of sample rates across the country, South Dakota comes in well below the national average. The state ranks at number 43 for average rates based on the sample, with a rate about $260 less than the national average for that same sample.

The Division of Insurance provides consumers with resources to help them when shopping for car insurance. This includes keeping records of complaints against insurance companies and a searchable database of insurers and agents licensed to do business in the state. These resources can help drivers to choose reputable companies when shopping around for car insurance.

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High-Risk Drivers

Drivers who have multiple tickets or accidents, have been convicted of serious violations, or have other issues affecting their qualification for insurance may be considered to be high-risk. These drivers generally face higher insurance rates, and in some cases, they may find it difficult to find an insurance policy willing to provide coverage.

South Dakota’s Automobile Insurance Plan is designed to help those high-risk drivers who are unable to obtain coverage elsewhere. This plan assigns each driver to an insurance company. It’s a last-resort option and applies only to drivers who have been turned down for car insurance on the voluntary market, or who can’t find a rate less than what is available under the Automotive Insurance Plan.

Teen Drivers In South Dakota

Teens in South Dakota can begin the licensing process at the age of 14. The state uses a graduated licensing program that puts teen drivers through several stages, allowing them to learn and improve driving skills over time. Each stage has its own requirements and restrictions.

Instruction Permit

At 14, teens can apply for a permit that will allow them to begin practicing driving skills.

With this permit, the teen driver can drive only with a driver who is 18 or older with a minimum of 1-year driving experience in the passenger seat between the hours of 6am and 10pm. Should the teen drive outside of these hours, there must be a parent or guardian beside them in the front seat.

The permit must be held for at least 180 days unless the teen completes an approved driver education course. With a successfully completed course, the time period is reduced to as little as 90 days.

Restricted Minor’s Permit

After the required time period with an Instruction Permit is complete, the teen driver can apply for the Restricted Minor’s Permit. To obtain this permit the teen must pass a knowledge test as well as a driving test.

This permit allows the teen driver to drive without supervision between the hours of 6 a.m. and 10 p.m. Driving during the nighttime hours is prohibited unless a parent or legal guardian is in the passenger seat.

Operator’s License

Teens can obtain an Operator’s Permit at the age of 16, as long as they have held a Restricted Permit with no violations. This is a full license without restrictions.

All teen drivers must have the same financial responsibility requirements as adult drivers. Parents or guardians can add the teen driver to an existing insurance policy; in most cases, teen drivers can remain insured this way even when away at school, until they establish a separate residence full-time.

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