A bill that would change how South Dakota determines whether a damaged vehicle is a total loss has drawn sharp opposition from the insurance industry, with the nation's largest property casualty trade group warning it could raise premiums and undermine road safety.
Senate Bill 227 would set a fixed 75% damage threshold for total loss declarations. The measure passed the state Senate and is being considered by the House Transportation Committee on February 24, 2026.
The American Property Casualty Insurance Association (APCIA), whose members write more than 57% of auto insurance in South Dakota, has come out against the legislation.
The bill would mark a structural change. South Dakota currently uses what is known as a total loss formula, which weighs repair costs against salvage value rather than applying a fixed percentage, data shows. Roughly half of US states use a similar approach.
The proposed 75% figure, however, is far from unusual. World Population Review data shows 15 states already apply the same benchmark, making it the most common fixed threshold in the country. Thresholds elsewhere range from 50% in Nevada to 100% in Texas and Colorado.
Brooke Kelley, assistant vice president of state government relations at APCIA, said the bill "would change how total-loss auto claims are handled in South Dakota and could threaten road safety and could result in higher auto insurance premiums for South Dakotans."
Total loss decisions should preserve the flexibility to address individual circumstances, Kelley said, warning that SB 227 "replaces that flexibility with a hard rule that could undermine safety, consumer choice and could drive-up costs."
The trade group has argued a rigid threshold could see vehicles with compromised structural integrity returned to the road. It also pointed to potential increases in disputes over repair estimates and vehicle valuations.
No study has directly quantified the premium impact of such a shift, but statewide data offers context. Bankrate figures, refreshed in November 2025, put South Dakota's average full-coverage premium at $1,553 per year.
A NerdWallet analysis from February 2026 places the figure higher, at roughly $2,118, noting auto insurance prices in the state are already climbing.
The debate comes as total loss frequency reaches record levels across the country. CCC Intelligent Solutions reported that through April 2025, 22.6% of all claims were declared total losses — up 0.9 percentage points year over year.
The average total cost of vehicle repair exceeded $4,730 in 2024, CCC data showed, a 3.7% annual increase.
APCIA said it is "extremely concerned about the potential impact of SB 227" and urged South Dakota lawmakers to vote against the measure.
