South Dakota Automobile Insurance Plan – SD AIP

Find Cheap Auto Insurance Quotes in Your Area

Currently insured?
{"id":6,"isAgeFieldVisible":true,"isInsuranceTypeFieldVisible":true,"isInsuredStatusFieldVisible":true,"buttonText":"Find Insurers","customEventLabel":"","defaultZip":"","defaultProduct":"auto","quoteWizardEndpoint":"https:\/\/","trackingKey":"_auto-insurance_south-dakota_high-ri","title":"Find Cheap Auto Insurance Quotes in Your Area","vendor":"vp"}

You may have trouble finding South Dakota auto insurance coverage if you have a record of traffic tickets or auto accidents. The insurance companies may look at your record and view you as a “high risk” for filing a claim in the future. If you are refused auto insurance due to a less-than-perfect driving history, you can turn to the South Dakota Automobile Insurance Plan (SD AIP). This Plan will ensure that you receive coverage, as long as you meet the eligibility criteria described below. In South Dakota, all drivers must have liability auto insurance coverage in the amounts - at a minimum - of 25/50/25 and Uninsured Motorist coverage of 25/50.

What is the South Dakota Automobile Insurance Plan (SD AIP)?

Since 1949, the state of South Dakota has required all auto insurance companies doing business in the state to participate in this assigned risk plan. The SD AIP is essentially an organization that assigns high risk drivers to existing insurers based on the market share of those insurance companies. So for example, if GEICO has 12% of South Dakota’s total auto insurance market, then GIECO will be assigned 12% of the high risk drivers by the South Dakota AIP.

How does it work? When a South Dakota driver is rejected by an auto insurer, the driver may ask his/her insurance agent to get a car insurance quote through the South Dakota AIP instead. If you qualify for the Plan by the eligibility criteria discussed below, your agent will submit an application for you, and you will be accepted into the Plan’s assigned risk pool. The AIP will assign you to an existing insurance company in South Dakota, and the insurer will handle your coverage, claims, and billing.

The good news is that all agents and brokers licensed to offer automobile insurance in the state of South Dakota are familiar with the Plan. And they can explain the Plan and its options to you. Nevertheless, try a couple more insurers before you resort fo the AIP; in 2014, only 1 application was submitted for the Plan, proving that most South Dakota drivers were able to buy insurance coverage in the voluntary market, where more affordable auto insurance is easier to find.

South Dakota AIP Eligibility

South Dakota considers the SD AIP a last resort for drivers who can’t find auto insurance coverage any other way. There are three requirements:

  • You must certify on your insurance application that you’ve tried unsuccessfully to find insurance within the last 60 days.
  • You also need a car registered in South Dakota and a valid driver’s license.
  • Lastly, you must fill out the application completely and truthfully.

If you do all of the above, your application should proceed successfully. However if your assigned insurer discovers that you have misrepresented important facts on your application, then they may cancel your policy within the first 60 days. And, the South Dakota Automobile Insurance Plan can refuse to allow you to re-apply for an entire year.

South Dakota Automobile Insurance Plan Coverage

South Dakota has a Financial Responsibility Law that requires all drivers to proof financial ability to pay for damages that they may cause to others in an auto accident. Obtaining auto insurance is one of the easiest ways to obey that law. Once you are assigned an insurer by the SD AIP, the coverage lasts for 3 years. The table below shows the insurance coverages that you are required to carry. Before you pick the minimum levels of coverage required, remember that any losses you incur that exceed the minimum will be your responsibility to pay.

Mandatory Coverage

South Dakota Required Min. LimitsSouth Dakota AIP Maximum Limits

Bodily Injury (BI)

$25,000 per person / $50,000 per accident$100,000 per person / $300,000 per accident

Property Damage (PD)

$25,000 per accident$50,000 per accident

Uninsured/Underinsured Motorist BI (UM/UIMBI)

$25,000 per person / $50,000 per accident$100,000 per person / $300,000 per accident

Your South Dakota insurer will also offer you optional coverages. These include Medical Payments to cover your own injuries, Auto Death Benefits for the family should the income provider be injured fatally, as well as Disability Benefit in case your injuries prevent you from earning your usual income for a period of time. Physical Damage coverage is composed of 2 parts: Comprehensive and Collision. In South Dakota you may buy both of these, or you can buy just Comprehensive coverage. You cannot buy Collision alone. If you do choose one or both, they come with a choice of deductible – from $100, $250, or $500 for Comprehensive and $100, $250, $500, or $1,000 for Collision. If you can manage a higher deductible, that will partially lower the cost of your auto insurance. Note that neither coverages in South Dakota is available for antique autos (over 25 years old.)

Optional CoverageSouth Dakota AIP Min. LimitsSouth Dakota AIP Maximum Limits


Actual cash value of your car, up to no more than $50,000No higher limit


Actual cash value of your car, up to no more than $50,000No higher limit

Medical Payments Coverage(MedPay)


Auto Death Benefits

$10,000No higher limit

Disability Benefits

$60 weekly for 52 weeks if insured was employed / $30 weekly for 52 weeks if insured was not employedNo higher limit

South Dakota AIP Premiums & Payment Plans

Premiums for auto insurance assigned through the SD AIP are higher than average, mostly because of the higher loss ratios associated with insuring high risk drivers. But there is no simple formula for determining exactly how much more they will cost. South Dakota auto insurers look at many different factors in pricing your policy and different insurers can weight those factors differently. The more you know about these factors, the more you can take actions that will reduce your auto insurance premiums over time.

You’ll be offered several ways to pay for your auto insurance. The first is to pay the entire annual premium up front with your application. The second is to pay 30% of your annual premium when you submit your application, and the remaining 70% within 30 days of receiving your policy. Finally, there is an installment plan. In this case, you pay 40% up front with the application, and the remainder in 5 equal monthly installments. If you choose the installment plan, there will be a $4 service added to the bill each month.

In the happy event that your driving record improves and you find auto insurance in South Dakota at a better price, you can notify your assigned insurer and receive a refund of the premium on a pro-rated basis from them.

How to Apply for Insurance through the South Dakota AIP

You can approach any licensed auto insurance agent or broker in South Dakota to ask about the SD AIP. They will be able to help you apply if it is a good option for you.

For more information about the South Dakota Automobile Insurance Plan, call the South Dakota Department of Insurance at 605-773-3563 or visit the South Dakota AIP website.


Comments and Questions

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.