South Dakota Car Insurance Laws

South Dakota state flagThe South Dakota state laws mandate that motorists must establish financial responsibility prior to having the ability operate a vehicle owned. Automobile owners can choose from several options to become financially responsible in SD and have a choice to comply with the state's requirements with a Certificate of Deposit with the State Treasurer, the purchase of a surety bond from an authorized broker or obtain an automobile liability policy from an insurer licensed to sell coverage in the state. Self-insurance is also an option for residents, but this is only available to individuals who have no less than 26 vehicles registered in their name.

The majority of motorists choose to comply with the state's financial responsibility requirement by purchasing an automobile policy from a licensed carrier. This is typically considered the most affordable and feasible option among consumers in order to be in compliance. Rather than purchase a bond or make a large deposit with the state, motorists can purchase a South Dakota auto insurance policy that meets the state's minimum requirements.

Drivers who wish to satisfy the state's financial responsibility laws by obtaining automobile policies must do so with required coverage and limits of the state, which includes the following:
  • Liability Coverage
    • $25,000 for bodily injury per person
    • $50,000 for bodily injury to two or more people, per accident
    • $25,000 for property damage
  • Uninsured and Underinsured Motorist Coverage (UM/UIM)
    • $25,000 for bodily injury per person
    • $50,000 for bodily injury to two or more people, per accident
The limits above are the absolute minimums allowed to be carried by a South Dakota motorist and will commonly be abbreviated as 25/50/25 and 25/50. However, consumers who wish to purchase higher limits may do so by paying the necessary premiums to the insurer for increased protection. It is also important for drivers to be aware that if they were to increase the limits of Uninsured and Underinsured Motorist Coverage, that the amounts are not stackable. What this means is that if the insured were to obtain UM/UIM limits of $300,000 and were injured in an accident involving an at-fault driver who carried $50,000 in bodily injury liability, they would not be able to "stack" the coverage and receive $350,000 in compensation towards injuries. Instead, the other driver's policy would pay the initial $50,000 and the remaining compensation available to the policyholder under UIM would be $250,000.
South Dakota silhouette
In addition, motorists must have the ability to furnish proof of insurance or another acceptable form of financial responsibility when requested by a law enforcement officer or if involved in a traffic accident. Being caught without the proper coverage may result in a Class 2 misdemeanor in addition to possible penalties that include $100 fine, up to 30 days in jail, suspension of driving privileges and/or the need to file an SR-22 with the Motor Vehicle Division.