A car is considered a total loss in South Dakota when the vehicle’s actual cash value is equal to or less than the cost of repairs plus the salvage value. Actual cash value refers to how much the car was worth immediately before the damage, while the salvage value is the car’s worth in its damaged state.
When a car is totaled according to the South Dakota totaled car law, the policyholder will receive the car’s actual cash value from the insurance company if the loss was covered. Insurance companies in South Dakota are not required to pay for applicable taxes and title costs if the policyholder purchases a replacement vehicle. However, it's worth asking your insurer anyway, since some companies will reimburse you or include these expenses in the total loss payout even though it's not mandatory.
South Dakota Total Loss Law Example
Pre-crash value: $15,000
Cost of repairs: $6,000
Salvage value: $10,000
Pre-crash value - cost of repairs - salvage value = -$1,000
Result: Car is totaled
In this example, the driver’s car is totaled according to South Dakota law because its pre-crash value, or actual cash value (ACV), is lower than the sum of its repair cost and salvage value.
It’s also worth noting that the vehicle used in this example probably cost more than $15,000 when it was originally purchased. The ACV is meant to reflect the car’s worth in its depreciated state, not the cost of replacing the vehicle. If you want a higher payout in the event of a total loss, you should look into optional coverage add-ons like new car replacement or gap insurance.
For more information on what it means for you if your car is totaled, check out WalletHub’s totaled car guide.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines
. This question was posted by WalletHub.
Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.