Best homeowners insurance in South Dakota for 2023

Compare the best homeowners insurance companies in South Dakota

South Dakota home insurance averages $2,105 annually for $250K in dwelling coverage, which works out to $175 a month. After comparing and analyzing quoted annual premium data, coverage options and third-party agency ratings from AM Best, J.D. Power and Standard and Poor’s (S&P), Bankrate found that USAA, Allstate, Travelers, Auto-Owners and State Farm offer the best South Dakota homeowners insurance.

Our Bankrate Score is calculated on a 5.0 scale and is based on industry-standard third-party rankings, state availability and digital accessibility. Metrics for customer satisfaction, financial stability, pricing and available features are also weighed to create the Bankrate Score. This score helps provide an easier comparison when shopping for the best South Dakota home insurance company.

*USAA not officially ranked by J.D. Power due to eligibility restrictions.

The top five home insurance companies in South Dakota

How Bankrate chose the best home insurance companies in South Dakota

Bankrate’s insurance editorial team chose the best homeowners insurance companies in South Dakota by comparing average rates, coverage options, discount opportunities, digital tools and third-party rankings among carriers that write home insurance in the state. Our Bankrate Score weighs all of these factors and more to create a score on a scale of 0.0 to 5.0 points, with 5.0 being the highest possible score. The higher the rating, the more the company excels in each category. Bankrate Scores are designed to help you more easily and quickly compare providers during your search for homeowners insurance.

How much is home insurance in South Dakota?

The average annual cost of homeowners insurance in South Dakota is $2,105 for $250,000 in dwelling coverage, according to 2023 rate data from Quadrant Information Services. This is 47 percent above the national average cost of $1,428 per year for the same coverage amount. It is also higher than the average cost of its neighboring states, with Minnesota at $1,930 per year and North Dakota at $1,900 per year.

There are several factors that go into South Dakota homeowners insurance companies’ rates. The cost of labor and materials in the area contribute to premiums, as well as local weather hazards and the volume of property damage claims filed by homeowners. South Dakota is in Tornado Alley and susceptible to severe convective storms, which can lead to more costly claims, driving up insurance costs as a result.

Average annual premium by dwelling coverage level in South Dakota

*Rates are for $250,000 in dwelling coverage.

How to find the best cheap home insurance in South Dakota

Although home insurance is not mandated by law the way car insurance is, it is wise to consider purchasing a policy if you are a homeowner to protect your investment in your home. If you have a mortgage, your lender will require it. Mishaps such as fire or storm damage can happen to anyone, and you could end up paying thousands of dollars out of pocket for repairs if you do not have home insurance. 

There are, however, several strategies you can consider to save money on your policy, including the following:

1. Shop around: Don’t just get one quote for coverage when you start looking. It's a better idea to ask several carriers for a home insurance quote for the same coverage types and levels so you can compare costs and determine the cheapest company for your needs.
2. Work on your credit score: Although it is restricted in some states, insurers in South Dakota are allowed to consider your credit history when calculating your premium. A higher credit-based insurance score is likely to earn you a lower rate on your policy, since people with lower credit scores tend to file more claims.  
3. Repair or replace your roof: An old or damaged roof can be the cause of an expensive claim, so your insurer may charge you a higher premium if your roof is nearing the end of its lifespan.
4. Bundle your policies: Most insurers offer a significant discount if you have more than one policy with them, so consider bundling your auto and home insurance with the same carrier for potential savings.
5. Increase your deductible: Your deductible is what you pay following a claim before insurance kicks in. The higher your deductible, the lower your payment; however, you should proceed with caution. Make sure that your deductible is an amount you are comfortable paying on short notice.

Common home insurance discounts in South Dakota

In addition to the tactics above, you may be able to save money if you ensure that you're getting all the discounts to which you are entitled. Almost every insurer offers at least a few potential discounts, and some are easy to earn. Here are some of the more common ones in South Dakota.

Home insurance coverage options in South Dakota

Based on the common cause of losses in South Dakota, you might want to opt for additional coverage or endorsements to better protect your finances after a covered loss. You may want to consider these coverage options when shopping for South Dakota homeowners insurance:

• Flood insurance: Flooding can happen anywhere, and South Dakota has been known to experience severe flooding events. Standard home insurance does not cover floods, so you may want to consider purchasing a flood insurance policy from the National Flood Insurance Program (NFIP) or a private insurer.
• Food spoilage: Most standard home policies provide up to $500 in food spoilage if a covered claim causes a power outage. With some companies, you can increase that coverage to higher limits. By increasing food spoilage coverage, you could stock your fridge and freezer without worrying about being out-of-pocket for the overage if the power goes out for an extended time.
• Equipment breakdown: Lightning damage is common in South Dakota, doing roughly $10.8 million in property damage each year. When a power surge happens because of a covered peril, such as lightning, it can fry your appliances and other personal property. Coverage varies by carrier and is subject to property coverage limits. Equipment breakdown coverage could expand this coverage, ensuring you can replace or repair appliances if needed after a covered loss. 
• Guaranteed replacement cost: Most South Dakota homeowners insurance companies offer extended replacement cost coverage, but not all offer guaranteed replacement cost coverage. Extended coverage usually offers a percentage over your dwelling coverage limit, typically around 25%. But with guaranteed replacement cost coverage, if your entire home needs to be rebuilt from damage caused by a winter storm, lightning strike or tornado, the cost to rebuild to the previous size and specifications is covered, no matter how much the total cost.

Frequently asked questions