Car insurance can feel like one more box to check before you get on the road, but the coverage you choose matters more than most drivers realize. The minimum required by Arkansas law keeps you legally covered, but it may not be enough to protect you if something serious happens.
The State of Arkansas requires at a minimum that all persons driving on Arkansas roads have at least liability insurance coverage which pays for any claims when you are at fault in an accident. The minimum liability amount that you are required to carry by law is $25,000 per person for bodily injury, $50,000 per accident, and $25,000 to cover property damage to other's property (sometimes referred to as 25/50/25).
The State of Arkansas also requires that insurance companies offer you medical payments, wage loss, underinsured and uninsured coverages. If you do not want these coverages, you have to sign to reject them. If you did not sign a rejection, these coverages may exist for you as a matter of law.
These additional coverage options are needed and vital to protecting you and your family. Here is a little bit more about each of them:
Commonly referred to as personal injury protection (PIP), these coverages will pay for medical expenses and lost wages when you are in an accident. How much of these bills will be paid depends on how much coverage you buy. The minimum coverage in Arkansas is $5,000 for medical bills and $140 per week or 70% of your salary for lost income.
Uninsured motorist coverage will pay for your injuries and damages when a wreck is caused by someone who does not have insurance of their own. You should have a sufficient amount of uninsured motorist coverage to pay for damages in the event you are in a severe accident.
Underinsured motorist coverage will pay if the person who causes the wreck does not have enough coverage to fully pay for your injuries and damages. Underinsured motorist is "excess" coverage over and above the liability limits of the person responsible for the accident. Again, underinsured motorist limits should be large enough to pay you adequately in the event that you are in a bad wreck and have a lot of medical bills and lost wages.
Arkansas law does not require insurers to offer collision or comprehensive coverage the way it requires medical payments, uninsured motorist, and underinsured motorist coverage. Even so, these two coverages fill a real gap that liability insurance does not touch: protecting your own vehicle.
Collision coverage pays for damage to your own vehicle after an accident, regardless of who is at fault. If you are in a wreck and your car needs repairs or is totaled, collision coverage is what pays for that, not liability insurance, which only covers the other driver's damages.
Comprehensive coverage pays for damage to your vehicle from events other than a collision, such as hail, fire, theft, vandalism, or hitting an animal. Given how often Arkansas sees severe hailstorms, this coverage matters more here than it might in other states. Currently, only about half of Arkansas drivers carry full-coverage insurance, leaving the other half exposed to paying for storm damage entirely out of pocket.
If you have a car loan or lease, your lender will likely require both collision and comprehensive coverage as a condition of financing. Even if you own your car outright, they are worth considering if replacing or repairing your vehicle out of pocket would be a real financial strain.
If your coverage limits are lower than the damages you cause, you may be personally responsible for the difference. This is why many drivers choose higher liability limits than the state minimum.
Yes, but you have to do so in writing. Without a signed rejection, Arkansas law treats these coverages as included in your policy.
The legal minimum is 25/50/25 ($25,000 per person for bodily injury, $50,000 per accident, and $25,000 to cover property damage to other's property), but many drivers carry higher limits to better protect their assets in the event of a serious accident.
If we can help answer these or other insurance coverage questions which arise from an accident, call us today for a free consultation.
DISCLAIMER: This blog post is for general informational purposes only and does not constitute legal advice. Reading this post does not create an attorney-client relationship. Contact our office directly to discuss your specific situation.
