So Just How Cheap Is South Dakota Car Insurance?

South Dakota has a lot of advantages over other states, especially when it comes to a low cost of living. One thing that helps people save money is low car insurance.

A new study by the personal finance website WalletHub South Dakota is the second cheapest state to insure a vehicle.

This isn't news for anyone who has moved to South Dakota from another state. In a world where inflation is making everything go up in price, I'm sure those people were pleasantly surprised to find out that their car insurance actually went down.

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Here's a personal South Dakota insurance saving story. In 2017, my wife moved to Sioux Falls from a small town in Michigan, the state with the highest average car insurance in the US. There she was paying $150 per month for full coverage on a 2013 Hyundai Elantra and this is with a clean driving record. When she transferred the car to South Dakota, her insurance went down to $65 per month for full coverage.

WalletHub says the reason South Dakota has a low car insurance rates is 51% of the population lives in rural areas. Lower traffic and fewer accidents and claims leading to lower rates.

Another reason is South Dakota has a very low percentage of uninsured drivers. On the other hand, Michigan has a high number of uninsured drivers. Estimates say around 20% of drivers are uninsured. That number spikes to around 60% for cities like Detroit.

Annual average car insurance rates for basic liability coverage for states in the upper midwest look like this:

• South Dakota - $326
• Wyoming -$274 (the lowest average in the US)
• Iowa - $326
• North Dakota -$370
• Nebraska -$427
• Minnesota -$758

However, not everyone in South Dakota pays less.

• 16-year-olds pay 449% more than 55-year olds.
• Drivers with a DUI pay 90% than someone with a clean record.
• People with full coverage insurance, comprehensive and collision insurance, pay 427% more than just basic liability at the state minimum.