The Impact Of Home Insurance Regulations For South Dakota Residences

Under South Dakota law, homeowners insurance is provided to the public with little to no regulation from the government. South Dakota has no specific acts which prohibit insurance companies from not renewing client's policies based on number of claims filed, current financial circumstances, or credit score. While the South Dakota Division of Insurance does minimally regulate insurance premiums, owners are largely left on their own to make sure that they are getting a fair deal for their home insurance coverage.

Coverage in South Dakota is broken up into five broad "forms" which are sold by insurance companies in the state. These are not forms in the paper or computer sense, but rather designations of different levels of coverage. The most basic is known as HO1 or "basic form" and covers only the hazards specifically listed in the policy. Most of these are hazards which could cause serious financial hardship, such as fire or theft from the home. HO2 or the "homeowners policy form" offers the same coverage as the HO1, but with additional coverage for the home and personal property against falling ice or snow, and some kinds of water damage (excluding floods). While this type of coverage is often referred to as being "broad", it does not cover as much as the next level up, HO3.

HO3 or "special form" covers all types of loss that could happen to a home, with a few exceptions that are specifically noted in the policy. This is a marked difference from the first two forms in which only items listed in the policy would be covered. HO3 offers a far broader range of home insurance coverage, with the exception of events such as war or nuclear radiation destroying the home. It is important to bear in mind, however, that while the level of home insurance increases with an HO3 policy, the amount of coverage offered for personal property does not differ from an HO2. That type of coverage must be purchased separately and as an add-on from the insurer.

In South Dakota, insurance companies have the option to not renew a client's policy if they make more than one home insurance claim during the term of the agreement. In fact, some companies will refuse to renew even after a single claim has been filed. There is no standardization in this field, and every consumer should be very clear on exactly what criteria will be used to both issue the policy initially, and how it can be cancelled. Under the Fair Credit Reporting Act, insurance companies can use credit history to influence insurance decisions, so it is well worth it to be extremely knowledgeable about all details of any home insurance policy.

http://www.homeinsurance.org/articles