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State law · SD
Against the at-fault driver, South Dakota's insurance regulator says a demonstrated loss of market value must be paid on a liability claim, and state tort law compensates all loss proximately caused. No appellate case deciding this was found. Against your own insurer, Culhane (2005) bars diminished value under a standard policy once the car is properly repaired, though an incomplete repair may still be claimed.
Claim against the at-fault driver
Generally allowed
Claim against your own insurer
Usually excluded by policy
Time limit to sue for property damage
6 years
Insurance regulator
Reviewed by Monica Fisher, Owner, Licensed Auto Appraiser and Court Expert Witness — appraisal perspective, not legal advice
Last reviewed
South Dakota law
Third-party claim
Generally allowed
Tort damages are the amount that compensates for all detriment proximately caused (SDCL 21-3-1). Division of Insurance Bulletin 03-02 (2003) says insurers remain obliged to pay a third-party claimant a demonstrated loss of market value. No South Dakota appellate decision applying this to post-repair diminished value was found, and the bulletin is an agency position, not a statute. Recovery is barred unless the claimant's negligence is slight compared to the other driver's (SDCL 20-9-2).
Authority: S.D. Division of Insurance Bulletin 03-02 (Dec. 11, 2003); SDCL 21-3-1; SDCL 20-9-2
First-party claim
Usually excluded by policy
Culhane v. Western National (S.D. 2005) held that a policy limiting payment to the lesser of actual cash value or repair does not cover diminished market value remaining after the car is repaired to its former physical, operating and mechanical condition. The court also found no bad faith in denying such a claim. Bulletin 03-02 adds that insurers still owe a claim if repairs do not substantively restore pre-loss physical condition.
Authority: Culhane v. Western National Mutual Insurance Co., 2005 SD 97, 704 N.W.2d 287; S.D. Division of Insurance Bulletin 03-02 (Dec. 11, 2003)
Case law
South Dakota Supreme Court · 2005
2005 SD 97, 704 N.W.2d 287
Under a collision policy limiting liability to the lesser of actual cash value or the amount necessary to repair or replace, the insurer's repair obligation did not include post-repair diminished market value once the vehicle was restored to its former physical, operating and mechanical condition. The court reversed the trial court, including on bad faith.
S.D. Division of Insurance Bulletin 03-02 (Dec. 11, 2003): Loss of Value or Diminution of Value Claims (agency bulletin, not a statute)
Replaces Bulletin 98-2. Insurers need not pay a first-party diminished value claim when the vehicle is completely repaired to pre-loss condition and the policy does not require it. Insurers still owe it if repairs do not substantively restore pre-loss physical condition. The bulletin does not alter the obligation to pay a third-party claimant a demonstrated loss of market value.
SDCL 21-3-1: General measure of damages for breach of noncontractual obligation
Tort damages are the amount that will compensate for all the detriment proximately caused, whether or not it could have been anticipated.
SDCL 15-2-13(1), (4): Six-year limitation
Six years for an action for injuring goods or chattels (subdivision 4) and for contract actions (subdivision 1).
SDCL 20-9-2: Comparative negligence
A plaintiff's contributory negligence bars recovery for injury to property unless it was slight compared with the defendant's negligence. If it was slight, damages are reduced in proportion.
SDCL 32-35-70: Owner's policy: minimum liability limits
At least $25,000 per person and $50,000 per accident for bodily injury, and $25,000 for property damage.
Researched September 30, 2026. General information from an appraisal perspective, not legal advice.
Autoloss in SD
We serve South Dakota from your repair order, photos and records, the same way we serve every state. A typical diminished-value appraisal is $250–$350, typically 24–48 hours after all required information is received.
Other states
The claim review is free: we look at your situation and tell you whether an appraisal is likely to help. The appraisal itself is a paid report. We help from start to finish, including a custom demand letter, and our support staff is a phone call away throughout the process.
