South Dakota ranks high as an affordable state to insure your vehicle — it has some of the cheapest 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 — I certainly was.

By comparing six companies side-by-side I was able to find a $716 difference between companies for the exact same coverage, the state minimum. Geico was my best choice in the area with a quote that fell at $1,030 per year, while State Farm made a stand for second place for $142 more. Both companies might have been the best car insurance options for me, but that doesn’t mean it’ll 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 our fingerprints, no two drivers have the same inputs: credit scores, marital status, cars we drive, our exact zip codes. The best way to insure maximum savings is to garner quotes from as many insurance companies as possible. I searched six different providers, but I would recommend looking at as many as you have time for — each quote takes less than ten 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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The Simple Dollar’s Top 6 Picks for the Best Car Insurance in South Dakota

  • Geico
  • State Farm
  • Safeco Insurance
  • Allstate
  • Farmers
  • American Family Insurance

I began my quest for the most affordable coverage in South Dakota with these six companies. Half of them have an “above average” (or higher) JD Power rating for the Central Region of the nation, as well as an A.M. Best rating of “Excellent” or higher. If you’ve never experienced an accident, you might not understand how important these two factors are. But if the worst happens (and, not to be too much of a downer, it probably will), you should be able to have complete faith that your provider will make the process better, not worse. Having an affordable quote is awesome, but being able to trust your auto insurance company to be there for you is just as important, if not more important. A few dollars saved might not seem worth it when you can’t get your insurance company to pay your claim.

Insurer My quote
Geico $1,030
State Farm $1,172
Safeco Insurance $1,272
Allstate $1,400
Farmers $1,562
American Family Insurance $1,746

After comparing all six quotes, I found $716 in savings between the highest and lowest quotes. Geico won the low bid at $1,030; State Farm coming in a close second place at $1,172. Safeco and Allstate both hit the over the $1,200 mark, 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 for me, they might be low 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.

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-making 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 spit a ton of your personal information (like online shopping habits, social media activity, and even how long you’ve been with your current cell phone 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’re 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 jumps 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. filling 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 like Maryland and Florida (15 in total) 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.

South Dakota’s Minimum Coverage

The Bare Minimum

South Dakota requires a driver to prove financial responsibility in order to legally drive on its highways. The easiest and most common way is 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 coverages, 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.

The Best Car Insurance is Not Just Cheap Car Insurance

Settling for cheap car insurance could be the difference between a financial crisis and a minor financial setback. Take a look at these to stats:

  • Every 17.9 years the average driver will be involved in a motor vehicle accident. Let’s say that we are not an exception to the rule.
  • The average cost of an accident that causes a disabling, but nonfatal injury is $79,400 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 — I could be on the hook for more than $55,000 out of pocket, not to mention the possible property damage I’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 my quotes for a 50/100/50 policy were cheaper than half of my quotes for minumum coverage. To me, the extra coverage. And honestly, if you haven’t gotten at least a handful of quotes lately, you might already be paying more than you need to and still getting worse coverage.

If You Skip Coverage, It’ll Cost You

It’s never a good idea to go without coverage. If you are unable to provide proof of insurance to an officer of the peace when requested in 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. 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.

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Why are South Dakota’s rates so cheap?

We’ve got some of the most affordable rates in the nation. Unlike our northern counterpart, our 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, and in South Dakota that’s about 99.7 percent of the state. (That’s 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 maintain the insurance laws of the state, as long as you are in compliance with the laws of the state which your car is registered in. 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.

An Expert’s Perspective

The Simple Dollar contacted Bryan A. Larson from Larson Law, who’s been practicing personal injury law for more than 30 years. He’s dealt with cases as simple as a no-injury fender bender to multi-million dollar accidents. We asked him if he’d had any experience dealing with particular insurance agencies: Were any easier to deal with through the claims process? Any that were more terrible? I had my ears open for any insight he could offer on State Farm, the company that was cheapest for me.

Many attorneys do not even bother with trying to negotiate with Farmers Insurance Company because they feel it’s simply a waste of time. Generally, with Farmers Insurance the only approach is to file suit against the insured as soon as possible. Accordingly, if you are insured by Farmers Insurance Company, from my perspective, you have a much greater chance of getting sued if you cause an accident than you would if insured by a carrier that still resolves claims by negotiation without litigation. Others may have different experience with Farmers, but this is my opinion.

Another important aspect in analyzing difficulty in dealing with insurance companies is that conditions often change. I have mentioned how difficult it is to deal with Farmers. This was not always true. There was a time when Farmers was one of the easiest to deal with. Likewise, there was a time when State Farm was one of the most difficult and unreasonable to deal with. However, in my experience, it seems that in recent years State Farm has become somewhat easier to deal with than they were 20 years ago. I suspect this has a lot to do with the fact that State Farm suffered big verdicts in a couple of cases around the country and they have lightened up in their approach to claims handling. State Farm has long had some of the best trained adjusters in the industry, but those adjusters do not make decisions on an individual basis for resolving claims. Instead, decisions are based on company policies, claims handling terms, and whatever the current status of claims evaluation happens to be in the company.

The Bottom Line

Low auto insurance rates are a staple in South Dakota. But even so, there are still plenty of savings to be found. I was able to get 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’ll help you save money later by avoiding incremental price hikes due to price optimization. It took me less than an hour to find over $700 in savings. Now it’s your turn — maybe you’ll beat my results.

Find the Best Car Insurance

Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.