Understanding your auto repair rights in South Dakota

After an accident, dealing with vehicle repairs and insurance can be confusing and stressful. This guide explains your rights under South Dakota law so you can make informed decisions.

Your right to choose is the law

In South Dakota, you have the absolute right to choose where your vehicle is repaired. ¹ Your insurance company cannot legally force you to use a specific repair shop. This is a core consumer right that allows you to select a facility you trust.

State law makes it an unfair trade practice for an insurer to “unreasonably restrict” your choice of a repair shop. ² This illegal practice is commonly called “steering.”

How to spot steering

Steering can be subtle. Insurers may use certain phrases or tactics to guide you toward their preferred shops, which may have agreements with the insurer to control costs. ³

Watch for these common steering tactics:

• Preferred shop lists: An insurer can offer a list of recommended shops, but they must also inform you that you are not required to use a shop from that list. ⁴
• Warranty warnings: An insurer might imply that repairs at your chosen shop won't be guaranteed. They may say they will only warranty the work of their network shops. The insurer has no legal duty to offer a similar warranty for an independent shop's work, which can frame your choice as a risk.
• Aftermarket parts pressure: Insurers may push for the use of non-original equipment manufacturer (non-OEM) parts to save money. You have the right to request OEM parts. If your policy requires you to accept non-OEM parts, the insurer must inform you. These parts are often warranted by their own manufacturer or distributor, not by the manufacturer of your vehicle.

The insurer’s duty to inform you

If an insurer suggests you use a particular repair shop, they must provide a written notice. This written notice is a formal requirement. ⁴

The law states this notice must inform you of your rights fully, conspicuously, and accurately. ⁴ This means the information must be complete and easy to understand.

It must clearly state that you have the right to choose your own repair facility. It also needs to explain any potential differences in the insurer's warranty or guarantee if you decide not to use one of their recommended shops. The notice cannot be hidden in fine print or be misleading.

Consumer protection organizations have long noted the importance of clear communication from insurers.

What happens if an insurer breaks the law?

Insurers who engage in unfair practices face penalties.

Violating the laws against steering is an unfair trade practice. ^{2 5} Such violations can result in fines. ⁶ While a single violation may carry a penalty of up to $1,000, state law allows for significantly higher fines, potentially up to $10,000, for willful or repeated violations. ⁶ The Division of Insurance has the authority to issue penalties it considers appropriate based on the specifics of the case.

Additionally, using "boycott, coercion, or intimidation" that results in an unreasonable restraint of the business of insurance is a Class 2 misdemeanor in South Dakota. ⁷ Actions that pressure or intimidate a consumer into giving up their right to choose a repair shop could fall under this statute.

Delays and claim processing

Insurers must operate in good faith when handling your claim. South Dakota law requires insurers to acknowledge and act within thirty days upon communications about claims. While a final deadline for claim settlement is not specified, insurers cannot create unreasonable delays.

What if my car is a total loss?

Sometimes, the damage to a vehicle is so severe that it is not practical to repair. This is known as a "total loss."

In South-Dakota, there is no specific percentage or formula set by law that automatically declares a vehicle a total loss. Instead, your insurance company will make a determination that the vehicle is a "total loss" based on their own assessment of the repair costs, salvage value, and the vehicle's pre-accident actual cash value (ACV). Once the insurer declares it a total loss and pays the claim, the vehicle is legally considered a "salvage vehicle."

general information, not legal advice.

Sources

1. South Dakota Codified Laws § 58-33-67(5) - https://sdlegislature.gov/api/Laws/Codified/58-33-67

2. South Dakota law does not specify what an insurer must do regarding a non-preferred shop's warranty if the insurer offers a warranty for its preferred shop's repairs. - https://sdlegislature.gov/api/Laws/Codified/58/33

3. An insurer may not specify the use of non-OEM aftermarket crash parts unless the consumer is advised in writing. - https://sdlegislature.gov/api/Laws/Codified/58-33-71

4. 16 CFR § 313.6 - Information to be included in privacy notices. (2010) - https://www.govinfo.gov/content/pkg/CFR-2010-title16-vol1/xml/CFR-2010-title16-vol1-sec313-6.xml

5. The director of the Division of Insurance may impose a money penalty of up to twenty-five thousand dollars for an insurer for each offense of an unfair trade practice. - https://sdlegislature.gov/api/Laws/Codified/58-4-28.1

6. South Dakota statutes and administrative rules do not provide a specific formula for how a 'prevailing' or 'customary' auto repair rate is calculated. - https://sdlegislature.gov/Laws/Codified

7. It is a misdemeanor to enter into any agreement or commit any concerted action of coercion or intimidation that results in an unreasonable restraint of the insurance business. - https://sdlegislature.gov/api/Laws/Codified/58-33-32