South Dakota FAIR Plan Alternative?

South Dakota is known for its continental climate and four distinct seasons. Residents are exposed to cold, dry winters and hot and semi-humid summers. The highest recorded temperature is 120° F at Usta on July 15, 2006 and the lowest was -58° F at McIntosh on February 17, 1936. Summers in South Dakota are typically filled with severe thunderstorms, high winds and hail while winter time ushers in blizzards and ice storms. This variety of weather events causes some of the state to be deemed as high risk and some of the state as very low risk for claim events by the major home insurance companies. Due to these factors the state department of insurance has not created a FAIR Plan.

As for natural disasters, floods and blizzards rank at the top for South Dakota. The Black Hills Flood of 1972 was probably the most severe floods in the history of the state. The flood was the result of over 15 inches of extreme rainfall over a six hour period the send Rapid Creek and other waterways overflowing. During the evening of the flood the Canyon Lake Dame failed which resulted in 238 deaths and over 3,000 injuries. Property damage was estimated at over $160 million dollars and cause thousands of homeowners insurance claims. In the October 2013 North American storm complex, a blizzard and tornado outbreak severely affected the Northwest, Rockies and much of the Midwest. 22 tornadoes were recorded while the system moved east across the area, include two that were rated as EF4.

Although South Dakota has its share of natural disasters, the property claims are less significant since the population is so spread out. This has helped losses to remain manageable for private insurers and therefore the state has not found the need to enter the insurance business in the form of a FAIR Plan. Homeowners insurance companies have more heavily underwritten the states that are at a higher risk of claims and as a result average homeowner insurance premiums are the same as the U.S. national average.

As with all FAIR Plans, consumers are urged to try to find coverage in the private market and we can help you find an agent that can help you find alternatives to the FAIR Plan.