South Dakota has some of the cheapest car insurance rates in the nation. But no matter what you’re paying now, it’s probably not the best you could find. Simply put, if you shop the market, you’ll be surprised by the savings waiting for you.
By comparing six companies side by side, there was a $716 difference between companies for the exact same coverage representing the state minimum. Geico was the best choice in the area with a quote that fell at $1,030 per year, while State Farm made second place with a policy costing $142 more. Both companies might have been the best cheap car insurance options for this situation, but that doesn’t mean that will be the case for you, as well.
Insurance firms are like fingerprints; no two are exactly the same. They each translate your personal and vehicle data into a premium in their own special way. And just like fingerprints, no two drivers have the same inputs. Credit scores, marital status, cars you drive and your exact ZIP codes will differ. The best way to ensure maximum savings is to garner quotes from as many insurance companies as possible. This example searched six different providers, but it can be worth it to look at as many as you have time for. Each quote takes less than 10 minutes if you have a clean record.
Online quotes are actually pretty handy and more comprehensive than you might think. With most companies, you can easily select the types of coverage you’d like and see the impact they’d have on your premium right then and there. If you need to or want to, call a company instead, bank another 10 minutes for each one. Sometimes brokers need to run multiple quote tests, which require extra time; therefore, you may need to leave a call-back number with them so you’re not on the line while they get to work.
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Our Top 6 Picks for the Best Car Insurance in South Dakota
Half of these companies have an “above average” (or higher) J.D. Power rating, as well as an A.M. Best rating of “Excellent” or higher. If you’ve never been in an accident, you might not understand how important these two factors are. But if the worst happens, you should be able to have complete faith that your provider will make the process better. Having an affordable quote is awesome, but being able to trust your auto insurance company to be there for you is just as important. A few dollars saved might not seem worth it when you can’t get your insurance company to pay your claim.
After comparing all six quotes, there was $716 in savings between the highest and lowest quotes. Geico won the low bid at $1,030; State Farm came in a close second place at $1,172. Safeco and Allstate both hit over $1,200, but Farmers and American Family were considerably higher. Don’t let those numbers make you cringe, though; every person will have a different experience. Make sure to check all of your options no matter what, even if they were high here, they might be lower for you. Definitely check your options for upgraded coverage, as well. Remember: A few extra dollars per year can make a world of difference in the event of an accident.
South Dakota’s Minimum Coverage Requirements for 2020
South Dakota requires a driver to prove financial responsibility in order to legally drive on its highways. The easiest and most common way to prove your solvency is by maintaining liability and uninsured/underinsured motorist coverage; the alternate routes include filing a $50,000 bond with the state treasury. Minimum limits for liability coverage, which covers costs you must pay in an accident that is deemed to be your fault, are $25,000 bodily injury per person, $50,000 bodily injury per accident, and $25,000 property damage. Uninsured/underinsured coverage, which kicks in for damage done to you by an uninsured or underinsured driver, must meet $25,000 bodily injury per person and $50,000 per accident.
Settling for cheap car insurance could be the difference between a financial crisis and a minor financial setback. Take a look at these stats:
- Every 17.9 years the average driver will be involved in a motor vehicle accident.
- The average cost of an accident that causes a disabling but nonfatal injury is more than $93,800 per person. Damaging an expensive car or property in the process will cost a great deal more.
- With South Dakota’s minimum coverage, which includes a $25,000 bodily injury limit, you could be on the hook for more than $55,000 out of pocket, not to mention the possible property damage you’d be liable for if the $25,000 in property damage allotted didn’t fully cover those damages.
You might think that an upgrade will cost a lot, and that it’s worth it to take the risk for the immediate savings. In fact, half of the quotes for a 50/100/50 policy were cheaper than half of the quotes for minimum coverage.
It’s never a good idea to go without coverage. If you are unable to provide proof of insurance to a police officer when requested to do so during a traffic stop, you will face problems: fines up to $100, jail time up to 30 days, suspension or revocation of your driver’s license and registration for up to a year, and mandatory filing of an SR-22 document for three years.
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Why are South Dakota’s rates so cheap?
South Dakota has some of the most affordable car insurance rates in the nation. Unlike its northern counterpart, the state follows the tort system rather than the no-fault system. This means that in every accident, one person must receive a majority of the blame and financial responsibility. Tort states tend to be cheaper because the no-fault system is often abused with dubious litigation. Plus, no-fault insurance also requires personal injury protection as an extra, and it’s not cheap.
Insurance companies also generally charge less for ZIP codes outside of urban zones because crime rates are lower and accidents are less frequent. In South Dakota, that’s about 99.7 percent of the state. South Dakota boasts the fourth-highest percentage of rural landmass in the country, which is no surprise if you’ve spent any amount of time driving there.
What if I’m not a full-time resident?
If you are a visitor to South Dakota, you are not required to follow the insurance laws of the state, as long as you are in compliance with the laws of the state in which your car is registered. But if you decide to stay in-state for more than 90 days, you must register your car in South Dakota and maintain the state’s mandatory insurance.
What is an SR-22 document?
An SR-22 is the same document that those convicted of driving under the influence must fill out in order to drive on the roadways legally. If you file one, you can say goodbye to low rates for a long time.
What is no-fault insurance?
No-fault insurance is a set of policies, typically required by a state, that makes each insurance company pay the injury costs of its customers in an accident rather than recouping the money from the other company. There are 13 states that have no-fault insurance laws. While neighboring North Dakota is a no-fault state, South Dakota is not.
Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years
Things like age, driving history, and vehicle make and model have been staples of the auto insurance rate-setting process for a long time, but in recent years, a new tactic has arisen. Welcome to the world of price optimization, the practice of analyzing non-risk-related data to determine a customer’s propensity to stick with his or her provider in spite of price increases.
Insurers input a ton of your personal information (like online shopping habits, social media activity, and even how long you’ve been with your current cellphone provider) into complex algorithms that estimate how likely you are to shop around. Then, they use that information to charge you a rate they believe you’ll be comfortable with, even if it’s higher than you deserve.
This should be one of the greatest incentives to shop around. Shopping for a new policy from multiple agencies will probably uncover hidden savings. Plus, it will also show your current provider that you’re not afraid to leave. And if you’re not afraid to leave, companies will be less likely to gouge you with incremental rate increases from year to year.
If you have questions about your insurance company’s policy regarding price optimization or have a suspicion that your rising rates are not due to risk-related factors (i.e., filing claims that you’re at fault for or receiving citations), contact your agent. Ask for an explanation. Better yet, write your senator and complain about it.
Many states, such as Maryland and Florida, have formally addressed price optimization with legal bulletins, requiring companies to come clean about the practice and release their information to the state. Unfortunately, South Dakota has not released any statements or laws regarding price optimization. For the time being, your best recourse is to continue shopping for better rates on a regular basis. It’s as simple as that.
Three types of customers will especially benefit from calling around regularly. Those with good driving records are the main profit centers for insurance rates; as your risks are lower based on your history, you are subject to a lot of enticements when you switch. Lots of insurance companies are happy to offer you discounts to pull you away. Young drivers tend to have higher rates because they fall into a bigger risk pool. As you age out of these brackets, it makes sense to call right away to get your rates lowered. Those with low credit can benefit from calling with each significant bump in their credit score, as you become more likely to have consistent, on-time payments.
Low auto insurance rates are a staple in South Dakota. But even so, there are still plenty of savings to be found. The example quotes showed the cheapest coverage from State Farm, but that might not be the case for you. Shop around and compare quotes from at least five different providers every year. Not only will this help you save money now, it will also help you save money later by avoiding incremental price hikes due to price optimization. It took less than an hour to find over $700 in savings.