🏠 Home Insurance

What Home Insurance Actually Covers

Homeowners insurance is a package policy. It bundles several types of protection into one, but it doesn't cover everything — and the gaps trip people up more than you'd think.

A standard HO-3 policy (the most common type) typically includes:

• Dwelling coverage — pays to repair or rebuild your home's structure if it's damaged by a covered peril like fire, wind, or hail
• Personal property — replaces your belongings (furniture, electronics, clothing) up to a limit, usually 50–70% of your dwelling coverage
• Liability protection — covers legal defense and medical costs if someone is injured on your property or you're found liable for damage to someone else's property
• Additional living expenses (ALE) — pays for hotels, meals, and temporary housing if your home is uninhabitable after a covered loss
• Other structures — covers detached garages, sheds, fences, and outbuildings (typically at 10% of dwelling coverage)

Common Pitfalls and Gaps

Most homeowners don't read their policy until they need it — and that's when the surprises hit. Here are the most common issues we see in South Dakota:

• Underinsured to rebuild — This is the #1 problem. Your policy should reflect what it would cost to rebuild your home today, not what you paid for it or what it would sell for. Construction costs have surged, and many policies haven't kept up.
• Flood isn't covered — Standard home insurance does not cover flood damage. Period. If you're anywhere near the Missouri River, Big Sioux, James River, or low-lying areas, you need a separate flood policy through the NFIP or a private carrier.
• Hail deductibles can be steep — Some carriers have switched to percentage-based wind/hail deductibles (1–5% of dwelling value) instead of flat dollar amounts. On a $300,000 home, a 2% deductible means you pay the first $6,000 out of pocket. Many homeowners don't realize this until after a storm.
• Actual cash value vs. replacement cost — An ACV policy deducts depreciation from your payout. If your 15-year-old roof is destroyed, ACV pays what a 15-year-old roof is worth — which isn't much. Replacement cost pays to put on a new roof. The difference matters enormously.
• Sewer backup isn't standard — Sewer and drain backup is a common cause of basement damage in South Dakota, but it's typically excluded. You need to add it as an endorsement.
• Personal property limits — High-value items like jewelry, firearms, collectibles, and electronics often have sub-limits (e.g., $1,500 for jewelry). If you own valuable items, you may need a scheduled personal property endorsement.
• Pipe freeze and water damage — South Dakota winters bring frozen pipe risk. Most policies cover resulting water damage, but there are conditions — and if the home was vacant or you failed to maintain heat, the claim can be denied.

What Makes South Dakota Different

South Dakota sits in the heart of the nation's most active severe weather corridor. That shapes everything about home insurance here:

• Hail frequency — South Dakota averages more damaging hailstorms per year than almost any other state. Your roof, siding, windows, and outdoor equipment are all at risk every summer.
• Tornadoes and straight-line winds — Wind damage is a leading cause of home insurance claims in the state. Make sure your windstorm coverage limits and deductibles are something you can actually live with.
• Spring flooding — Snowmelt and heavy spring rains cause regular flooding along South Dakota's rivers and creeks. Even if you're not in a FEMA flood zone, the risk may be higher than you think.
• Harsh winters — Extended sub-zero temperatures stress pipes, roofs, and heating systems. Ice dams can cause interior water damage that's expensive to repair.
• Rural response times — In rural areas, fire departments may be volunteer and 20+ minutes away. Some carriers factor this into pricing, and your coverage needs may be different than in Sioux Falls or Rapid City.

Why This Is a Job for an Independent Agent

Home insurance isn't commodity. The difference between a good policy and a bad one can be tens of thousands of dollars when you file a claim — and you won't know which one you have until it's too late.

An independent agent writes with many different carriers, so they can compare how each one handles hail deductibles, replacement cost guarantees, and claims service in South Dakota specifically. A captive agent gives you one option. An independent agent gives you the right one.

When a June hailstorm shreds your roof or a January cold snap bursts your pipes, your agent is the person who picks up the phone. They walk you through the claim, deal with the adjuster, and fight for your payout. That's what having a local advocate means.

Helpful Questions to Ask Your Agent

Bring these to your next conversation. They'll help you and your agent find the gaps before a claim does:

• Is my dwelling coverage enough to rebuild at today's construction costs — not just what I paid for the house?
• Is my wind/hail deductible a flat dollar amount or a percentage of dwelling value?
• Do I have replacement cost or actual cash value on my roof?
• Is sewer and drain backup covered, or do I need to add it as an endorsement?
• Do I need a separate flood policy, even if I'm not in a FEMA flood zone?
• Are my high-value items — jewelry, firearms, collectibles — fully covered, or are there sub-limits?
• If my home is uninhabitable after a loss, how much does additional living expenses cover and for how long?