Outline reference: State Section II, "SD Statutes Pertinent to Property and Casualty Insurance," items A (Binders), B (Suit against insurer), C (Rating), D (Certificate of Insurance), E (Valued Policy Law), F (Flood Insurance), G (Marine and Transportation Insurance), H (Cancellation and Nonrenewal) and I (Surplus lines). Section II carries 12 scored items on the combined exam (8 on the Property-only exam) and the outline does not divide them among its twelve lettered headings. Items J (Automobile Insurance Plan), K (private-passenger automobile) and L (workers compensation) are in Chapter 12.
In Section II, South Dakota's answer may differ from the national one: ninety days for a binder, a conclusive-value rule for a total fire loss, sixty and thirty days for a nonrenewal notice.
11.1 How to Read This Chapter
Source note. Laws and rules cited here were read on October 13, 2026 on sdlegislature.gov, bulletins on dlr.sd.gov/insurance, and federal material at eCFR and the U.S. Code. Confirm any figure with the Division of Insurance before relying on it. This book is not an approved pre-licensing or continuing education course and implies no endorsement by the Division or by Pearson VUE.
What "Property" means in the Insurance Code. "Property insurance" is insurance on real or personal property of every kind and every interest in it, against loss or damage from any hazard, and against consequential loss, other than noncontractual legal liability. (SDCL 58-9-5) A coverage may fall within two or more kinds of insurance. (SDCL 58-9-1) This matters in Section 11.9, where the cancellation and nonrenewal rules turn on which sections of chapter 58-9 define the policy.
11.2 Binders (State Outline II.A)
Outline "Ref": SDCL 58-11-29 through 58-11-31. Sub-item: 1. Evidence of insurance.
A binder is temporary insurance given before the policy is issued, so coverage starts when the customer needs it: a family closing on a Brookings house on Friday needs coverage Friday.
Form and content (SDCL 58-11-29). Binders may be made orally or in writing. A binder is deemed to include all the usual terms of the policy, together with the endorsements designated in the binder, except as superseded by the clear and express terms of the binder.
Fraud (SDCL 58-11-29). A producer or surplus lines broker who knowingly makes any false or fraudulent material statement on a binder, certificate of insurance, or other document offered as proof of insurance commits a Class 1 misdemeanor for each offense. (SDCL 58-11-29; SDCL 22-6-2)
Duration (SDCL 58-11-30). No binder is valid beyond the issuance of the policy for which it was given, or beyond ninety days from its effective date, whichever period is shorter.
Extension (SDCL 58-11-31). If the policy has not been issued, a binder may be extended beyond the ninety days with the written approval of the director, or under the director's rules.
Life and health are excluded from the binder sections. (SDCL 58-11-32)
Evidence of insurance (II.A.1). A binder is a producer's proof that coverage exists until the policy arrives, and binders are among the records kept five years. (ARSD 20:06:01:05.01; SDCL 58-30-91) A binder also fixes the cancellation date of a replaced policy: if the replacing policy is already effective when the insured asks to cancel the old one, the old policy's cancellation date is the new policy's effective date, provided the insured gives the replaced insurer a copy of the replacing policy's declarations or a binder issued under the replacing insurer's authority (or the replaced policy or a completed lost-policy release); otherwise it is the date of the request. (ARSD 20:06:29:02)
### In South Dakota A binder ends when the policy is issued or ninety days from its effective date, whichever is shorter; only the Director's written approval (or a rule) keeps it alive past ninety days. "The producer may extend the binder for another ninety days" is wrong.
11.3 Suit Against Insurer (State Outline II.B)
Outline "Ref": SDCL 15-2-13(1).
Except where a different limitation is prescribed by statute, civil actions (other than for recovery of real property) can be commenced only within six years after the cause of action accrued, and the first listed is an action upon a contract, obligation or liability, express or implied. (SDCL 15-2-13(1)) An insurance policy is a contract, so a suit on the policy falls here.
- Six years is the default for a suit on the contract, running from when the cause of action accrues, a legal question not simply the date of the loss.
- A policy may contain its own suit-limitation condition; the book found no South Dakota statute in the property chapters read that fixes or invalidates a shorter property-policy suit clause. The one insurance-specific minimum found (no limit shorter than six years) applies only to life and annuity contracts, not property. (SDCL 58-15-51; SDCL 58-15-1)
- For the exam, the safe answer is six years under SDCL 15-2-13(1). For a real claim, read the policy's suit condition.
11.4 Rating (State Outline II.C)
Outline "Ref": SDCL 58-24-1, 58-24-5.
Purpose and standard (SDCL 58-24-1, 58-24-5). Chapter 58-24 regulates rates, and cooperative rate-making among insurers, without prohibiting reasonable competition. The standard is one sentence: "Rates shall not be excessive, inadequate, or unfairly discriminatory." Excessive is too high; inadequate, too low.
Scope. The chapter applies to all casualty insurance (including fidelity, surety and guaranty bonds), property, fire, marine and inland marine insurance, and workers' compensation, on risks in this state. (SDCL 58-24-2) It does not apply to reinsurance, life, health, title, or "ocean" marine. (SDCL 58-24-3)
How rates are tested. The director may consider past and prospective loss experience (at least the most recent five-year period available), catastrophe hazards, a reasonable margin for profit and contingencies, dividends, and other relevant factors. (SDCL 58-24-6) A rate is unfairly discriminatory if it clearly fails to reflect equitably the difference in expected losses and expenses; different premiums from different expense factors or exposures, or averaging under a group, franchise or blanket policy, do not make it so. (SDCL 58-24-6.1)
Filing. Every insurer must file every manual, class rate, rating schedule, rating plan and rating rule it proposes to use. The filing date is the effective date unless the insurer proposes a later one. (SDCL 58-24-10) The director may not disapprove a filing whose rates meet the chapter's requirements; finding an effective filing noncompliant requires a hearing on at least ten days' written notice. (SDCL 58-24-18, 58-24-21) An insurer may not issue a policy except in accordance with its filings. (SDCL 58-24-25)
Exempt commercial policyholders. An insurer issuing a policy to an exempt commercial policyholder is exempt from rate filing under chapter 58-24 and form filing under SDCL 58-11-12, but at solicitation must disclose on a form created by the insurer that the rate or form may not be subject to the Division's filing requirements. (SDCL 58-24-70) The policyholder buys P&C insurance (except title or workers' compensation) through a risk manager and meets at least two of seven criteria: $50,000 in aggregate premium in the prior calendar year; net worth of $10 million; revenues of $10 million; 100 full-time employees; a nonprofit operating budget of $2.5 million; a public entity operating budget of $10 million; or a municipality population of 20,000. (SDCL 58-24-68)
### In South Dakota Bulletin 26-01 (February 16, 2026) requires new or revised crop hail rate and form filings by SERFF no later than February 15 of the year of use, and permits a cash discount of no more than five percent only if filed. It does not permit discounts for limit, premium volume, an MPCI package, claims-free history, or tie-ins with other lines. (Bulletin 26-01)
11.5 Certificate of Insurance (State Outline II.D)
The outline gives no statute for this heading; South Dakota regulates certificates through SDCL 58-11-29 (Section 11.2) and Division bulletins. A certificate of insurance tells a third party (a landlord, a lender) that a policy exists. It is evidence, not the policy.
| Bulletin | Date | What it says |
|---|---|---|
| 06-02 | February 15, 2006 | A certificate cannot provide false information; an agent may not issue one that misstates the policy's terms without authority from the insurer. |
| 09-05 | August 7, 2009 | Any new P&C certificate issued on or after September 1, 2009 must contain (Bulletin 10-01: January 15, 2010 date): "This certificate of insurance does not affirmatively or negatively amend, extend, or alter the coverage afforded by the insurance policy." |
| 09-06 | August 13, 2009 | Substantially similar language (as on ACORD 24 and 25) suffices, but their cancellation language generally does not comply unless the insurer has agreed in writing to follow it; otherwise strike or delete it. |
| 10-01 | January 13, 2010 | A certificate promising notice to the certificateholder is not permissible unless notice is specifically provided for in the policy. Options: ACORD 24 and 25 (2009-09), the Division's forms (COPI-01-10, COLI-01-10), or a sentence stating that the cancellation portion is left blank and no notice other than the policy's is promised. |
Counterfeit certificates are a fraudulent insurance act. (SDCL 58-4A-2(1); Chapter 8)
### In South Dakota A Rapid City contractor asks for a certificate saying the insurer "will give the certificateholder thirty days' notice of cancellation." Unless the policy contains that obligation, the producer cannot write it; she deletes the cancellation portion or uses the Bulletin 10-01 sentence. Writing it anyway risks a Class 1 misdemeanor under 58-11-29 if knowingly false and material.
11.6 South Dakota Valued Policy Law (State Outline II.E)
Outline "Ref": SDCL 58-10-10.
A valued policy law makes the insurer pay the face amount in a total loss rather than a figure argued after the fire. South Dakota's version is narrow.
The rule. Whenever a policy is written or renewed to insure real property in this state against loss by fire, tornado or lightning, and the property is wholly destroyed, without criminal fault on the part of the insured or the insured's assigns, the amount of insurance written in the policy is taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages.
The conditions.
- Ninety-day wait. The rule applies only if a total fire loss occurs ninety days or more after the policy was made or written, or ninety days or more after the limits were increased by twenty-five percent or more at the insured's request. Within the first ninety days, the policy's valuation terms govern.
- Exceptions to the ninety-day condition. It does not apply to unchanged renewal policies, to policies with inflation adjustment limits, or to policies being converted to replacement cost coverage from a lesser-value form and upon which there is a written agreement that the policy will be written on a valued basis.
- Builders' risk. A builders' risk policy is valued by the actual value of the portion of the construction completed at the time of loss.
- Multiple policies. If two or more policies cover the same interest, each insurer pays only the proportion its limit bears to the total insurance.
- Appurtenant structures. Loss of an appurtenant structure is settled at actual replacement or actual cash value per the policy, unless a specific value was assigned to each structure before the loss.
- Commercial blanket. The section does not apply to total loss of a building insured under a commercial blanket form with one amount covering two or more buildings.
(SDCL 58-10-10)
What the statute does not say. It names fire, tornado and lightning, not hail, windstorm, flood, earthquake or theft, so a total hail loss to a barn is not a valued-policy loss. It covers real property, not contents, and not when the insured has criminal fault such as arson.
Insurable interest. A property contract is enforceable only for persons with an insurable interest in the things insured at the time of the loss: an actual, lawful and substantial economic interest in the safety or preservation of the subject. (SDCL 58-10-7, 58-10-8) A change of interest by will or succession on the insured's death does not avoid the insurance. (SDCL 58-10-11, 58-10-12)
### In South Dakota Mnemonic: F-T-L, real property, 90 days, total. Fire, tornado, lightning; real property; ninety days after the policy was written (or after a 25 percent limit increase at the insured's request); wholly destroyed. If any element is missing, the policy's ordinary valuation clause governs.