CAR INSURANCE IN SOUTH DAKOTA

 

CAR INSURANCE IN SOUTH DAKOTA

 

South Dakota Governor Dennis Daugaard believes he has finally solved the insurance coverage problems that have plagued the state since the oil boom began in 2007.

 

South Dakota residents who have purchased a car in the last decade are being forced to buy a second auto insurance policy that is separate from the one they already have from their existing auto insurer. According to South Dakota Insurance Commissioner Paul Norbeck, a driver must have a second insurance policy in order to drive a car purchased in the state.

 

This issue was first noticed by South Dakota Insurance Department employees and eventually forced a major emergency hearing last summer.

 

During the hearings, South Dakota Insurance Department employees explained that drivers do not have the option to simply pick an auto insurance policy offered by their existing insurance provider. The insurance department allows insurance agents to steer potential customers towards their competing insurance providers.

 

Some auto insurance policies include a clause that states if the second policy is not purchased within 30 days of purchasing the first insurance policy, the new policy does not kick in. The policies can be expensive, costing anywhere from $1,000 to $2,500 per year. According to those who attended the hearing, the auto insurance is only offered to drivers who have purchased a vehicle in the last two years. Those who have purchased their first vehicle within the last decade must have a second insurance policy in order to drive the car they have already purchased.

 

A portion of this issue was also brought up in the court case of Colton Byrde. Byrde, who was driving home from the state fair in 2008, was stopped by the South Dakota Highway Patrol for expired tags and a rear license plate light violation. The police officer found narcotics in Byrde’s car, arrested him and eventually convicted him of drug possession and drug trafficking. Byrde had to pay more than $6,000 in fines.

 

In his defense, Byrde’s lawyer claimed that his client only purchased insurance that was more than two years old when he purchased his vehicle and was unaware that the second policy would kick in.

 

The South Dakota Supreme Court has upheld the jury’s verdict. The court ruled that South Dakota’s law requiring two insurance policies is constitutional.

 

“Under current state law, in order to drive a car in South Dakota, one must obtain insurance from an insurance carrier, obtain a second policy from that same insurance carrier, and then drive the insurance policy registered with the second policy,” the court stated in its ruling.

 

Daugaard told reporters during a press conference on Wednesday that his intention was not to provide financial relief to drivers who currently have coverage from a second insurance company. Daugaard said his goal is to limit the problem that has plagued South Dakota for years.

 

“The reality of insurance for insurance is that you pay your premiums, you take care of your obligations, and then sometimes you have a claim, you get the claim paid, and then sometimes you have an insurance claim that you have to pay,” he told reporters.

 

“If there’s going to be insurance in this state, it must work properly,” he added.

 

OTHER INSURANCE PRECAUTIONS IN SOUTH DAKOTA

 

The state’s Department of Insurance has also been able to take insurance companies to court over other problems, like reducing the monthly insurance premiums after a car accident.

 

This past summer, Insurance Department employees challenged the insurance companies that