Detailed Answer

This section gives a step‑by‑step approach you can use in South Dakota when an insurer’s settlement offer after an accident looks unreasonably low. It explains the ordinary claims process, your dispute options, and the deadlines you must watch.

1. Understand what the offer covers

First, read the offer and your insurance policy. Confirm whether the insurer has paid medical bills, property damage, lost wages, or only a partial amount. Check whether the insurer conditioned the offer on signing a full release (a document that typically ends your ability to recover more money later).

2. Document the full value of your claim

Put together a complete package showing the damages you have suffered. Typical items include:

• Medical records and itemized billing (current and expected future care).
• Proof of lost income or reduced earning capacity (pay stubs, employer statements).
• Receipts for property repair, rental car, and other out‑of‑pocket expenses.
• Photos of injuries and vehicle/property damage, and witness contact info.
• Notes about pain, disability, or daily limits that help support non‑economic damages.

3. Send a clear written demand

Prepare a demand letter that itemizes damages, states the total settlement amount you are seeking, and attaches key documents. Give a reasonable deadline for response (commonly 14–30 days). A written demand helps establish you attempted to resolve the matter before escalating it.

4. Negotiate, but avoid signing a release too soon

Expect back‑and‑forth offers. When you negotiate, keep a written record of all communications and never sign a full release until you receive the agreed funds and understand any lien or subrogation obligations. Releases usually end your right to sue for additional compensation.

5. Use contract dispute mechanisms in your policy

Some policies include alternative resolution processes:

• Appraisal: Common in property insurance. An appraiser for you and one for the insurer pick an umpire to decide the value.
• Mediation or binding arbitration: These processes can be faster and cheaper than court, depending on the policy and the insurer’s position.

Check your policy’s “conditions” or “disputes” section and follow any required steps and timeframes.

6. File a consumer complaint with the South Dakota Division of Insurance

If you suspect the insurer acted unfairly—refusing reasonable investigation or failing to negotiate in good faith—you may file a complaint with the South Dakota Division of Insurance. The Division accepts complaints, can investigate unfair claim practices, and will sometimes facilitate informal resolution. See the Division of Insurance consumer information: https://dlr.sd.gov/insurance/.

7. Consider litigation and watch the statute of limitations

If negotiations fail, you can file a lawsuit in civil court to pursue the full value of the claim. For most personal injury and property damage claims in South Dakota, you must file within the state statute of limitations for such claims (commonly three years for many injury and damage claims). See the relevant South Dakota statute: SDCL §15-2-14. Filing before the deadline preserves your right to sue if negotiation or administrative steps don’t succeed.

8. Evaluate a bad faith or unfair practices claim

South Dakota law regulates insurer conduct under the state insurance code (Title 58). If an insurer denies or undervalues a claim without a reasonable basis or fails to properly investigate, you may have additional claims beyond the underlying injury claim, including claims based on unfair claim settlement practices and other remedies under the insurance code. See South Dakota insurance law (Title 58): https://sdlegislature.gov/Statutes/Codified_Laws/58. Because these claims involve factual and legal complexity, contact a lawyer if you think an insurer acted unreasonably.

9. When to hire a lawyer

Consider hiring an attorney if:

• Your injuries are serious or likely to require future medical care.
• The insurer’s offer is substantially below documented damages.
• Liability is disputed or there are complex legal issues (comparative fault, multiple insurers, or subrogation liens).
• The insurer is unresponsive, denies coverage, or the case involves bad faith.

In many personal injury cases, attorneys work on contingency (they get paid a percentage only if you recover money). Ask about fees and costs before you sign a fee agreement.

10. Common pitfalls to avoid

• Don’t accept the first offer without checking full medical prognosis and future costs.
• Don’t sign a full release until you understand all liens (health insurer, Medicare, Medicaid) and receive payment.
• Preserve all records and correspondence—lost evidence weakens your position.
• File suit before the statute of limitations expires if negotiation stalls.

Short hypothetical example

Jane is injured in a car crash in South Dakota. The insurer offers $5,000 while her medical bills are $12,000 and she will need ongoing physical therapy. Jane requests medical records and an itemized offer explanation, sends a written demand asking for $35,000 (including future care and pain and suffering), and begins negotiations. The insurer refuses and the claim remains unresolved. Jane files a complaint with the South Dakota Division of Insurance and, before the three‑year deadline, consults an attorney and files suit to pursue full damages and potential bad faith remedies if the insurer’s conduct was unreasonable.

Helpful Hints

• Keep a single organized file (digital and physical) with all medical records, bills, receipts, photos, and communication.
• Send important communications by certified mail or email so you have proof of delivery.
• Ask the insurer to explain how it calculated its offer; they must provide the basis for denials or low offers in many cases.
• Request an itemized settlement worksheet showing how the insurer computed payments and offsets.
• Understand liens: health insurers, Medicare, or other providers may require repayment from any settlement.
• Be cautious with quick cash offers; low lump sums often come with broad releases that close the door on future claims.
• If you hire a lawyer, ask about the expected timeline, costs, and likely outcomes before signing a fee agreement.
• Use the South Dakota Division of Insurance consumer resources for help and complaint filing: https://dlr.sd.gov/insurance/.

Important legal note: This article explains general information about South Dakota procedures and options. It is not legal advice. For advice about a specific situation, talk to a licensed South Dakota attorney who can evaluate your facts and explain your rights.