Most people expect their insurance to be a safety net—there when you need it most. However, after filing a claim, some policyholders are surprised to receive a notice stating that their coverage is being canceled or not renewed. Suddenly, the protection they paid for feels like it’s being pulled out from under them.
So, can your insurance company drop you in South Dakota just because you filed a claim? The answer is: sometimes, but not without specific rules and protections in place. Here’s what South Dakota law says about post-claim cancellations, your rights as a policyholder, and what you can do if your coverage is threatened.
The Difference Between Cancellation and Nonrenewal
It’s important to first understand the difference between cancellation and nonrenewal of an insurance policy:
- Cancellation means your insurer terminates your policy before the end of its term.
- Nonrenewal means the insurer decides not to continue your policy when it expires.
Each has different rules and timelines under South Dakota law. Typically, an insurance company can only cancel your policy mid-term for particular reasons, such as:
- Nonpayment of premiums
- Fraud or misrepresentation on your application
- Suspended or revoked driver’s license (in auto insurance cases)
However, filing a claim alone is not a legal ground for mid-term cancellation in most cases.
Can Filing a Claim Lead To Nonrenewal?
While one claim generally won’t get your policy canceled mid-term, it can influence your insurer’s decision not to renew your policy when it expires. Insurance companies are allowed to review your claim history when deciding whether to offer you a new policy term.
This is especially true if:
- You’ve filed multiple claims within a short time
- The claim involved significant damage or liability
- The claim suggests a pattern of high risk (such as multiple car accidents or repeated property damage)
Insurers use this information to assess whether you pose a higher risk—and therefore a higher cost—for the future. If they determine that insuring you is no longer worth the risk, they may choose not to renew your policy.
What Notice Is Required?
In South Dakota, your insurance company must give you advance written notice before canceling or choosing not to renew your policy. For most types of insurance:
- Cancellation notice typically must be provided at least 20 days in advance.
- A nonrenewal notice usually must be provided at least 30 days before your policy expires.
This gives you time to shop for a new policy, appeal the decision if necessary, or address any issues that may have contributed to the decision.
Can You Fight an Unfair Cancellation or Nonrenewal?
In some cases, you may be able to challenge an insurer’s decision, especially if you believe it was made in bad faith or violates South Dakota insurance regulations. For example:
- If your insurer failed to provide proper notice
- If the cancellation was based on an unlawful reason
- If the insurer is retaliating after a legitimate claim
You can file a complaint with the South Dakota Division of Insurance or speak to an attorney to explore your legal options.
What You Can Do To Protect Yourself
Here are a few ways to reduce the risk of cancellation or nonrenewal after filing a claim:
- Always be honest and accurate when filing a claim
- Keep good records of communication with your insurer
- Maintain your property to avoid preventable damage
Talk To an Insurance Attorney Today
If you’ve recently filed a claim and are concerned about losing your insurance coverage, the experienced attorneys at Abourezk Law Firm are here to help. We can review your situation, explain your rights under South Dakota law, and assist you in taking action to protect your policy.
Reach out to us today for a private consultation and gain the peace of mind you deserve.