Auto insurance is mandatory in most of the states if you have to drive around legally. This is done to ensure that the motorist adheres to the financial responsibility laws of the state. The term financial responsibility means that a person who causes the accident should have sufficient funds to cover damages that are caused during the accident and that will include providing for the medical expenses of the injured person/persons, cost of repair, and damage to property as well. The tort system is followed in South Dakota hence it is also known as the tort state. As per the laws, it has to be proven that the person was responsible for causing the accident. Then he/she will have to pay for all the damages that are caused in the accident. Hence, auto insurance is made mandatory in the state of South Dakota.
The minimum liability chosen by the state is known as 25/50/25. This stands for twenty five thousand dollars for bodily injury per person per accident. There is also fifty thousand dollars set aside for bodily injury per person in total. Property damage liability is for a total of twenty five thousand dollars. Bodily injury will cover the medical costs for any person involved in the accident. It will also cover any lost wages. Property damage will cover any damage caused to the injured person’s car. It will pay for the repair and replacement if needed. It will also pay for any damage caused to buildings, fences and lamp posts etc.
Another common form of insurance would be the under insured motorist coverage. It is possible that many people just choose to buy insurance for the minimum liability amount. However, many times this does not cover the costs of the accident. In such a scenario, underinsured motorist coverage will cover for all your damages. Uninsured motorist coverage will help you cover any damages caused due to an uninsured motorist. This is important in states with a high percentage of uninsured motorists. In fact, quite a few states have made this insurance mandatory.
Physical damage insurance coverage is also very popular. Physical damage comprises of two main kinds of insurance coverage. They are collision and comprehensive damage policies. Collision damage will ensure your car’s damages will be paid for in the event of an accident that you might have caused. It will pay for any subsequent repairs on your car. It will also pay for replacements if needed. Comprehensive damage will cover the costs of any damage your car might incur due to any other forms of damage other than being in an accident. This includes any damage due to theft or even vandalism. It will also include damage due to natural agents such as rain or hail or even snow.
Financial responsibility
Every state has its prescribed liability requirements where you would be required to prove that you are in a position to pay for injuries or damage that may be caused in the event of an accident.
Apart from carrying an auto insurance policy, you can also explore other options such as:
- Surety Bond – You will have to obtain a surety bond with a surety company authorized by the state.
- Cash Deposit – Here you would be required to place a huge cash deposit of $25,000 to $100,000 with the states treasurer or DMV.
When this is done you have to carry the certificate of deposit or bond with you at all times as this will provide the necessary proof of financial responsibility.
Providing Proof of Insurance
If you have purchased insurance and have still been pulled up for proof of insurance, you will certainly understand the importance of having auto insurance in South Dakota. At any given point in time, it is important that you carry proof of insurance with you to show the authorities that you meet the requirements of the state’s minimum liability insurance requirements.
After you purchase your auto insurance policy, the auto insurer will send you the proof of insurance. Some of the states have electronic reporting where the insurance company will directly contact the state’s DMV with the proof. However, even if you do live in states where this is done, it is still a wise decision to carry ample proof of insurance on you at all times. When you fail to produce proof of insurance or proof of financial responsibility you can get yourself into some serious trouble and will have to face the consequences.
Tips To Get Discounts On Auto Insurance
Auto insurance is mandatory, but it need not be expensive. There are a ways and means to find discounts on auto insurance premiums as long as you follow a few tips. Insurers offer a number of discounts but most people are not aware of it.
There are a few things you should bear in mind if you wish to avail discounts. The first step would be to obtain quotes from different vendors and compare the quotes. You can obtain free quotes online and do a cost comparison and see who offers the best coverage. There are a number of vendors who offer the best coverage at an affordable price.
Before you obtain quotes from the insurers, you must ensure that you are thoroughly aware of the laws that prevail in your state. Each state has different laws and some form of insurance is mandatory. After you have understood the difference between optional coverage and coverage that is mandatory, you may apply for a quote.
You will be able to avail a discount if – you are over 50 years of age but below 65, if you have a good driving record, if you have a good credit history, good grades in college, show lesser mileage driven etc.
Every state in the United States has its own set of rules and regulations. Each of these laws has been written to ensure the safety of its citizens. Each and every of these laws have to be followed. Any person found violating these laws can be penalized with revoked or suspended licenses, fines and penalties or even imprisonment. It must be remembered that any violation of the law on the road will put you, your family and another family in danger.
