Proposed Legislation in South Dakota to Change Vehicle Total Loss Criteria

A legislative proposal under review in South Dakota seeks to change the criteria for declaring a vehicle a total loss, sparking opposition from the insurance industry. Senate Bill 227 proposes a 75% damage threshold to identify total losses, a standard that, if implemented, would shift the current evaluation method. While the state Senate has approved it, the bill is currently under consideration by the House Transportation Committee as of February 24, 2026.

South Dakota's existing system relies on a formula that compares repair costs to the salvage value, a common method in around half of U.S. states. The proposed 75% threshold mirrors practices in 15 states, per World Population Review. Despite this, the American Property Casualty Insurance Association (APCIA), representing a significant portion of South Dakota's auto insurance market, opposes the bill, citing potential impacts on how total-loss claims are managed, road safety, and insurance premiums.

Brooke Kelley of the APCIA warns that a rigid 75% threshold could compromise safety by allowing unrepaired vehicles back on the road, create disputes over repair estimates, and affect consumer options and insurance costs. Though no direct study predicts premium changes, data as of February 2026 highlight rising insurance costs, influenced by national trends such as increased total-loss claim frequencies and escalating average repair costs, which surpassed $4,730 in 2024.