South Dakota Considering Bill APCIA Says Could Increase Auto Insurance Costs

The South Dakota Legislature is considering a bill that would establish a statutory 75% minimum damage threshold for declaring a vehicle a total loss, which insurers say could negatively impact drivers through increased premiums and reduced road safety.

Senate Bill 227 passed the Senate and is being considered in the House Transportation Committee this week.

The American Property Casualty Insurance Association opposes the bill, arguing that total loss claims decisions should be guided with the goal of safe, quality repairs to address individual circumstances. APCIA says SB 227 replaces that flexibility with a hard rule that could undermine safety and could drive-up costs.

According to the group, rigid repair thresholds often increase disputes over valuation and repair estimates and slow claims processing. Mandated repairs could also increase the expenses associated with paying claims, and drive up insurance costs for South Dakota drivers, according to APCIA.