How to Buy Insurance for Your South Dakota Dwelling

Homeowners insurance should be a top priority for anyone who owns a home, including residents of South Dakota. From tornadoes to snow storms, having a well-funded plan provides a financial safeguard for policyholders if disaster should strike.

Why You Need This Protection

Homeowners insurance provides financial reimbursement for structural damage to a policyholder's home resulting from a variety of catastrophic events. This financial protection also covers costs related to any damage to personal property.

There are plenty of reasons you would need to protect your dwelling and personal property. These range from fire damage to hurricanes and tornadoes, vandalism, smoke, frozen pipes and so on. As you can imagine, it would be stressful enough to go through one of these situations with insurance. Consider how much misery you would have to go through if you weren't covered.

Homeowners insurance also covers personal liability claims against the policyholder if the policyholder or a family member inflicts bodily harm or property damage to a visitor or guest on the property.

It is important to note that these policies do not shelter against all events. It does not look after damages stemming from neglect, fraud on behalf of the policyholder, flooding, earthquakes or terrorism.

How to Buy the Right Plan

When shopping for a plan, consumers should be aware of how much coverage they wish to purchase. The amount of coverage a policyholder purchases will impact his or her rates.

The levels of protection are typically categorized in three different ways:

Actual Cash Value: Actual cash value provides enough to replace the policyholder's home and/or personal property after taking depreciation and useable lifespan into account.

Replacement Cost: Replacement cost provides enough to replace the policyholder's home and/or contents without subtracting anything in terms of depreciation or useable lifespan.

Guaranteed Replacement Cost:This add-on guarantees coverage for the entire cost to rebuild the policyholder's home to its exact likeness before the destructive event took place.

Farm and Ranch Options

One of the characteristics for which this state is known is its extensive farm country. In fact, there were approximately 31,300 farms in South Dakota in 2007, according to the U.S. Department of Agriculture.

With so many in the state, farm and ranch policies are vital. While homeowners insurance covers the policyholder's primary residence, farm and ranch coverage extends that coverage to the many facets of a working farm.

Most farm and ranch policies will shelter one's home and personal property as well as personal property, including livestock, and any buildings and structures. Some policies also will include machinery.

Flood Considerations

As noted, your standard plan does not protect against damage resulting from flooding. For this reason, homeowners should augment their policies with flood protection, especial South Dakota residents.

A March 2009 report from the National Weather Service noted that much of South Dakota, specifically along the James River, will be at above-average flood risk this year. The report points out that the melting of heavy winter snowfalls is expected to increase the risk for flooding.

For more information on how to purchase the right amount of protection, residents can contact the SD Office of Emergency Management, which administers the National Flood Insurance Program for South Dakota in partnership with the Federal Emergency Management Agency, better known as FEMA.