Arkansas Auto Insurance
The auto insurance policy is comprised of several separate types of coverages. You are required by law to purchase liability protection only. All others are voluntary unless required by a lienholder.
Under Legislation passed in 1987 and 1999, it is unlawful for any person to operate a motor vehicle within this state unless the vehicle is insured with the minimum amount of liability coverage: $25,000 for bodily injury or death of one person in any one accident; $50,000 for bodily injury or death of two or more persons in any one accident and $25,000 for damage to or destruction of the property of others.
Bodily injury Liability (BI) protects you against a claim which may be made by someone who has been injured in a auto accident for which you are legally liable. You will have coverage up to the limits stated in your policy.
Property damage Liability insurance (PD) protects you against a claim for damage to another person's auto or other property, real or personal, in an accident for which you are legally liable. You will have coverage up to the limits of your policy.
You may purchase higher limits of BI and/or PD liability if you feel the minimums required by law are not enough to protect you. Your agent can assist you in determining the appropriate amount.
Collision coverage pays for damage to your automobile as the result of colliding with another vehicle or object, regardless of who is at fault. Collision coverage has a deductible that you must pay for the repair of your automobile.
When buying collision coverage consider the amount of the deductible you can afford. The larger the deductible, the less premium you will have to pay. You should not have a deductible so large that you cannot afford to pay it if your automobile is damaged.
Comprehensive coverage pays for damage to your automobile caused by collision with a bird or animal or damage caused by something other than a collision with another vehicle. Hazards covered under comprehensive include fire, theft, vandalism, water, hail, windstorm, and flood. This coverage can be purchased with or without a deductible.
Loan Requirements
When you finance your automobile, the lending institution will require that you have coverage on your automobile. The lending institution will be named as a loss payee on your policy so that its financial interest in the automobile will be protected. You should be aware that in the event of a total loss of your automobile, the actual value of your car may be less than the balance you owe to your lender. The purchase of Gap protection should be given consideration at the time of purchase of a vehicle.
If you should fail to purchase or maintain coverage on your automobile the lending institution will purchase coverage and you will be required to pay the lending institution any premium it had to pay for this coverage. This lender placed coverage is much more expensive than coverage you can purchase and may protect only the interest of the lender.
Personal injury protection is offered in three parts. You may purchase any one or all three coverages; however, if you decide you don't want any part of this coverage you must reject it in writing.
These three coverages are medical payments, which include payments for doctor bills, X-rays, ambulance, funeral expenses; lost wages (with certain restrictions) and death benefits.
This coverage protects you and members of your household who are injured or killed while riding in your automobile. It will also cover passengers in your automobile who are not members of your household if they do not have this coverage under their personal auto policy. It also covers any pedestrian or cyclist struck by your automobile.
Uninsured motorist bodily injury pays certain expenses for you and members of your household who are injured due to the negligence of an uninsured motorist. These expenses include medical bills, disability and death benefits resulting from that accident up to the limits of coverage purchased. Ark. Code. Ann. § 23-89- 403(3)(A) mandates the insurer offer uninsured motorist bodily injury limits up to the liability limits the applicant has elected.
This coverage is available in two parts -- uninsured motorist bodily injury (UMBI) and uninsured motorist property damage (UMPD). You may purchase the bodily injury without purchasing the property damage coverage; however, in order to purchase the property damage coverage, you must first purchase the bodily injury coverage.
Uninsured motorist property damage pays for damages to your automobile subject to a $200.00 deductible if your auto is damaged by an uninsured motorist. The $200.00 deductible does not apply if your auto is insured by the same company for collision coverage and UMPD coverage, the uninsured motorist is positively identified, and solely at fault.
Any person who purchases liability coverage will be offered Uninsured Motorist Coverage. This coverage will be included in the policy unless you sign a statement rejecting the coverage.
Underinsured Motorist coverage pays should you be struck by another party who does not have sufficient liability coverage to pay for all of your damages for bodily injury. This coverage may pay the excess expenses up to the limit of the coverage you purchased.
The company may cancel your policy after it has been in effect for over sixty (60) days for only the following reasons :
- Nonpayment of premium;
- Fraud/Misrepresentation in applying for the policy;
- Homicide arising out of use of a motor vehicle;
- Three separate convictions of speeding and/or reckless driving within the policy period and three months prior to the beginning of the policy period;
- Conviction of driving while intoxicated.
A company must give you a 20 day written notice of their intent to cancel for the above reasons. However, a company must only give you a 10 day written notice if cancellation is due to nonpayment of premium.
