Arkansas Auto Insurance Regulations
Arkansas
Insurance Department
AUTOMOBILE
INSURANCE
Julie Benafi eld
Mike Beebe
Bowman
Governor
Commissioner
A Message From State Insurance Commissioner
Julie Benafi eld Bowman
The Arkansas Insurance Department takes very seriously its
mission of "consumer protection." We believe part of that mission
is accomplished when consumers are equipped to make informed
decisions. We believe informed decisions are made through the
accumulation and evaluation of relevant information.
This booklet is designed to provide basic information about
automobile insurance. Its purpose is to help you understand terms
used in the purchase of auto insurance and how those terms affect
your coverage.
If you have questions or need additional information, please
contact our Consumer Services Division at:
Phone: (501) 371-2640; 1-800-852-5494
Fax: (501) 371-2749
Email: insurance.consumers
Web site: www.insurance.arkansas.gov
Mission Statement
The primary mission of the State Insurance
Department shall be consumer protection
through insurer insolvency and market
conduct regulation, and fraud prosecution
and deterrence.
1.
Coverages Provided by Automobile Insurance
The automobile insurance policy is comprised of several separate types of
coverages: COLLISION, COMPREHENSIVE, LIABILITY, PERSONAL
INJURY PROTECTION, UNINSURED MOTORIST, UNDERINSURED
MOTORIST and other coverages. You are required by law to purchase liability
protection only. All others are voluntary unless required by a lienholder.
LIABILITY
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.
Liability bodily injury (BI) protects you against a claim which may be made
by someone who has been injured in a automobile accident for which you are legally
liable. You will have coverage up to the limits stated in your policy.
Liability property damage (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.
Coverage For Your Automobile
COLLISION
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.
2.
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
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 fi re, theft,
vandalism, water, hail, windstorm, and fl ood. This coverage can be purchased with
or without a deductible.
Loan Requirements
When
you
fi nance 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 fi nancial 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
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 and funeral expenses; lost wages (with certain
restrictions) and death benefi ts.
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.
3.
UNINSURED MOTORIST
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 benefi ts 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 fi rst 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 and UMPD coverage, the uninsured motorist is positively identifi ed,
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
Underinsured Motorist pays should you be struck by another party who does
not have suffi cient 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.
Arkansas Automobile Assigned Risk Plan
If you cannot obtain auto liability insurance through the voluntary market, you
may have your agent apply for coverage for you through the Assigned Risk Plan.
Purchasing Automobile Insurance
You should be aware that in a competitive insurance market insurance
companies charge different amounts for essentially the same coverage. Shopping
around may result in savings to you on your automobile insurance. Be sure to take
into consideration the services provided by the company.
4.
Here are a few ideas that may help you save money when purchasing your
automobile insurance:
· Consider increasing the amount of your deductible. Decide how much of the
initial loss to your automobile you can afford to pay and see what deductibles
various companies offer.
· Consider having a deductible on your comprehensive coverage rather than
no deductible at all. You may even want the same deductible on both
Comprehensive and Collision.
· Submit proof that any young drivers have completed a driver education course
which meets the standards set by the National Conference of Driver Education.
You may be entitled to a discount.
· If you have a driver over the age of 16 and under the age of 25 who is either
a full time student or a graduate of a college or university with a "B" or better
grade average or a 3 point average on a 4 point scale, this driver may qualify
for a good student discount.
· High performance cars, sports cars and exotic cars are usually rated higher by
insurance companies. In fact, it may be diffi cult to fi nd a company that would
be willing to insure the automobile.
· Inquire about any discounts the company may offer. If you insure more
than one automobile, you may qualify for a multi-car discount. Discounts to
nondrinkers, nonsmokers, and accident-free drivers may be offered.
· Arkansas law requires insurance companies to give a discount on auto
premiums to insureds over 55 years of age who have completed a motor vehicle
accident prevention course approved by the Offi ce of Motor Vehicles.
Filing a Claim
Your insurance policy will outline your duties to the insurance company in
case of a loss:
Report all accidents to the police.
Report the loss to the company as soon as reasonably possible.
Use reasonable care to prevent further damage to your car.
Cooperate with the company in settling the claim.
File a proper proof of loss which the company will provide to you.
Forward all documents concerning any lawsuit arising from any accident to
your company immediately.
5.
Cancellations
The company may cancel your policy after it has been in effect for over sixty
(60) days for only the following reasons:
(1) Nonpayment of premium;
(2) Fraud/Misrepresentation in applying for the policy;
(3) Homicide arising out of use of a motor vehicle;
(4) Three separate convictions of speeding and/or reckless driving within the
policy period and three months prior to the beginning of the policy period;
or
(5) 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.
Non-Renewal
If your company decides to nonrenew your policy on the expiration date, it
must give you a 30 day written notice of its intent to nonrenew.
When applying for coverage with another company you cannot be refused
coverage based solely on the fact you have been previously nonrenewed.
6.
Shopping for Insurance
When shopping for insurance, here are some basic questions the company
will ask. You will need to supply this information to the agent in order to obtain
an accurate quote.
1. Principal owner and all potential operators of vehicle in the household.
_____________________________________________________________
2. Sex and age of each driver _____________________________________
3. Driver's license number of each driver _______________________________
_____________________________________________________________
4. Marital
status
________________________________________________
5. Accidents or moving violations of each driver in last three (3) years.
_____________________________________________________________
______________________________________________________________
6. Number of miles driven to and from work __________________________
7. Estimated number of miles driven each year ________________________
8. Type of auto to be insured
Model
Year
Auto
1
____________________
________
Auto
2
____________________
________
Auto
3
____________________
________
9. Have you ever been cancelled or nonrenewed? ______________________
7.
COMPARISON OF AUTOMOBILE INSURANCE COST
Limits
Annual Premium
or
Coverage
Deductible
Company 1 Company 2 Company 3
1. Liability:
Maximum Amount
Policy Will Pay
Bodily Injury
______ per person
______
per
accident
Property Damage ______ per accident
2. Damage to Your Insured Vehicle
Comprehensive ______
deductible
per accident
Collision
______
deductible
per accident
3. Medical Payments ______ per person
4. Uninsured Motorist
Property
Damage
_______
Bodily
Injury
_______
5. Underinsured Motorist
6. Personal Injury Protection
A. Medical Bills
B. Loss of Wages
C. Accidental Death
TOTAL PREMIUM
7. Membership Fees (If Any)
8. Other Coverages
TOTAL COST OF INSURANCE
8.
For more information contact:
Mike Beebe
Julie Benafi eld
Governor
Bowman
Commissioner
Consumer Services Division
1200 W. Third Street, Little Rock, AR 72201
Phone: (501) 371-2640, (800) 852-5494
Fax: (501) 371-2749 fax
Web site: www.insurance.arkansas.gov
E-mail: Insurance.consumers
Rev. 01/07
Insurance Department
AUTOMOBILE
INSURANCE
Julie Benafi eld
Mike Beebe
Bowman
Governor
Commissioner
A Message From State Insurance Commissioner
Julie Benafi eld Bowman
The Arkansas Insurance Department takes very seriously its
mission of "consumer protection." We believe part of that mission
is accomplished when consumers are equipped to make informed
decisions. We believe informed decisions are made through the
accumulation and evaluation of relevant information.
This booklet is designed to provide basic information about
automobile insurance. Its purpose is to help you understand terms
used in the purchase of auto insurance and how those terms affect
your coverage.
If you have questions or need additional information, please
contact our Consumer Services Division at:
Phone: (501) 371-2640; 1-800-852-5494
Fax: (501) 371-2749
Email: insurance.consumers
Web site: www.insurance.arkansas.gov
Mission Statement
The primary mission of the State Insurance
Department shall be consumer protection
through insurer insolvency and market
conduct regulation, and fraud prosecution
and deterrence.
1.
Coverages Provided by Automobile Insurance
The automobile insurance policy is comprised of several separate types of
coverages: COLLISION, COMPREHENSIVE, LIABILITY, PERSONAL
INJURY PROTECTION, UNINSURED MOTORIST, UNDERINSURED
MOTORIST and other coverages. You are required by law to purchase liability
protection only. All others are voluntary unless required by a lienholder.
LIABILITY
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.
Liability bodily injury (BI) protects you against a claim which may be made
by someone who has been injured in a automobile accident for which you are legally
liable. You will have coverage up to the limits stated in your policy.
Liability property damage (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.
Coverage For Your Automobile
COLLISION
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.
2.
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
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 fi re, theft,
vandalism, water, hail, windstorm, and fl ood. This coverage can be purchased with
or without a deductible.
Loan Requirements
When
you
fi nance 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 fi nancial 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
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 and funeral expenses; lost wages (with certain
restrictions) and death benefi ts.
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.
3.
UNINSURED MOTORIST
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 benefi ts 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 fi rst 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 and UMPD coverage, the uninsured motorist is positively identifi ed,
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
Underinsured Motorist pays should you be struck by another party who does
not have suffi cient 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.
Arkansas Automobile Assigned Risk Plan
If you cannot obtain auto liability insurance through the voluntary market, you
may have your agent apply for coverage for you through the Assigned Risk Plan.
Purchasing Automobile Insurance
You should be aware that in a competitive insurance market insurance
companies charge different amounts for essentially the same coverage. Shopping
around may result in savings to you on your automobile insurance. Be sure to take
into consideration the services provided by the company.
4.
Here are a few ideas that may help you save money when purchasing your
automobile insurance:
· Consider increasing the amount of your deductible. Decide how much of the
initial loss to your automobile you can afford to pay and see what deductibles
various companies offer.
· Consider having a deductible on your comprehensive coverage rather than
no deductible at all. You may even want the same deductible on both
Comprehensive and Collision.
· Submit proof that any young drivers have completed a driver education course
which meets the standards set by the National Conference of Driver Education.
You may be entitled to a discount.
· If you have a driver over the age of 16 and under the age of 25 who is either
a full time student or a graduate of a college or university with a "B" or better
grade average or a 3 point average on a 4 point scale, this driver may qualify
for a good student discount.
· High performance cars, sports cars and exotic cars are usually rated higher by
insurance companies. In fact, it may be diffi cult to fi nd a company that would
be willing to insure the automobile.
· Inquire about any discounts the company may offer. If you insure more
than one automobile, you may qualify for a multi-car discount. Discounts to
nondrinkers, nonsmokers, and accident-free drivers may be offered.
· Arkansas law requires insurance companies to give a discount on auto
premiums to insureds over 55 years of age who have completed a motor vehicle
accident prevention course approved by the Offi ce of Motor Vehicles.
Filing a Claim
Your insurance policy will outline your duties to the insurance company in
case of a loss:
Report all accidents to the police.
Report the loss to the company as soon as reasonably possible.
Use reasonable care to prevent further damage to your car.
Cooperate with the company in settling the claim.
File a proper proof of loss which the company will provide to you.
Forward all documents concerning any lawsuit arising from any accident to
your company immediately.
5.
Cancellations
The company may cancel your policy after it has been in effect for over sixty
(60) days for only the following reasons:
(1) Nonpayment of premium;
(2) Fraud/Misrepresentation in applying for the policy;
(3) Homicide arising out of use of a motor vehicle;
(4) Three separate convictions of speeding and/or reckless driving within the
policy period and three months prior to the beginning of the policy period;
or
(5) 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.
Non-Renewal
If your company decides to nonrenew your policy on the expiration date, it
must give you a 30 day written notice of its intent to nonrenew.
When applying for coverage with another company you cannot be refused
coverage based solely on the fact you have been previously nonrenewed.
6.
Shopping for Insurance
When shopping for insurance, here are some basic questions the company
will ask. You will need to supply this information to the agent in order to obtain
an accurate quote.
1. Principal owner and all potential operators of vehicle in the household.
_____________________________________________________________
2. Sex and age of each driver _____________________________________
3. Driver's license number of each driver _______________________________
_____________________________________________________________
4. Marital
status
________________________________________________
5. Accidents or moving violations of each driver in last three (3) years.
_____________________________________________________________
______________________________________________________________
6. Number of miles driven to and from work __________________________
7. Estimated number of miles driven each year ________________________
8. Type of auto to be insured
Model
Year
Auto
1
____________________
________
Auto
2
____________________
________
Auto
3
____________________
________
9. Have you ever been cancelled or nonrenewed? ______________________
7.
COMPARISON OF AUTOMOBILE INSURANCE COST
Limits
Annual Premium
or
Coverage
Deductible
Company 1 Company 2 Company 3
1. Liability:
Maximum Amount
Policy Will Pay
Bodily Injury
______ per person
______
per
accident
Property Damage ______ per accident
2. Damage to Your Insured Vehicle
Comprehensive ______
deductible
per accident
Collision
______
deductible
per accident
3. Medical Payments ______ per person
4. Uninsured Motorist
Property
Damage
_______
Bodily
Injury
_______
5. Underinsured Motorist
6. Personal Injury Protection
A. Medical Bills
B. Loss of Wages
C. Accidental Death
TOTAL PREMIUM
7. Membership Fees (If Any)
8. Other Coverages
TOTAL COST OF INSURANCE
8.
For more information contact:
Mike Beebe
Julie Benafi eld
Governor
Bowman
Commissioner
Consumer Services Division
1200 W. Third Street, Little Rock, AR 72201
Phone: (501) 371-2640, (800) 852-5494
Fax: (501) 371-2749 fax
Web site: www.insurance.arkansas.gov
E-mail: Insurance.consumers
Rev. 01/07