DEPARTMENT OF REVENUE AND REGULATION PHONE:
DIVISION OF INSURANCE
FAX: (605) 773-5369
445 EAST CAPITOL AVENUE
PIERRE, SD 57501-3185
South Dakota Division of Insurance
AUTO INSURANCE COVERAGE
Understanding Your Auto Insurance Policy
Auto insurance is an important purchase. Understanding what your policy covers is essential to
ensuring you will have the necessary insurance protection when a loss occurs.
Who Needs Auto Insurance?
Automobile accidents can cause great financial and economic insecurity. Financial loss may
include property damage, medical bills, and legal costs if a lawsuit arises. Anyone who owns a
car should purchase auto insurance so that these important financial protections are provided.
South Dakota requires the owner of a vehicle to purchase insurance or provide proof of financial
responsibility. In addition, your auto lender may require you to purchase auto insurance to
protect them against damage to a financed vehicle.
Most auto liability insurance policies contain three major parts: liability insurance for bodily
injury, liability insurance for property damage, and uninsured/underinsured motorist coverage.
• Bodily injury liability insurance does not protect you or your car directly. If you cause an
accident in which other people are injured due to your negligence, this insurance protects
you against their claims for damages, such as medical expenses, and lost wages.
• Property damage liability insurance pays for any damage you cause to the property of
others, such as damage to another vehicle, fence, or tree caused by a collision.
• Uninsured motorist coverage protects you directly. This coverage pays if you are injured
by a hit-and-run driver or a driver who does not have auto liability insurance. This
coverage, in effect, takes the place of the liability insurance that the other driver should
have purchased but did not. Underinsured motorist coverage applies when the other
driver is at faul