Car insurance in Arkansas

Arkansas goes with the majority of US states by relying on the traditional law of tort to underpin its car insurance industry. In this, note the unusual status of insurance. This is one of the few services regulated exclusively by the states and not by federal law. This places direct responsibility on each Insurance Commissioner appointed to regulate the terms and conditions on which insurance can be sold.

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Why is this important?

Like all other US states, Arkansas has a Financial Responsibility Law of 1954 and the Compulsory Liability Insurance Law of 1954. The point is to give drivers an incentive to put the right financial resources in place before getting behind the wheel. There’s a mandate requiring all vehicle owners to carry liability insurance. To get a license, you should prove you have insurance. If stopped or involved in an accident, you should be carrying proof of coverage in the form of an Insurance Card. The minimum amounts are 25/50/25, i.e. $25,000 is available to pay the medical expenses of one person injured, $50,000 covers multiple claims for medical treatment, and $25,000 to make good property damage. When these minimums were put in place in 1954, they were large sums of money. Today, they would not usually be inadequate to cover even the average claim for personal injuries. If you have assets and/or a job with a good rate of pay, you should seriously consider buying more than the statutory minimum.

The law of tort fixes the driver most at fault with the bill for all the loss and damage flowing from the accident. This covers not only repair or replacement of damaged vehicles, but all the costs and expenses arising from the personal injuries. This includes the actual cost of treatment, loss of earnings, replacement of personal possessions and clothing damaged in the accident, rebuilding the home to enable living with permanent disability, damages for pain and suffering, and so on. That’s why most vehicle owners with assets to protect prefer to buy more than the minimum. They also buy collision and comprehensive to repair or replace their vehicle if it’s damaged or lost.


Anyone resident in Arkansas or moving to take up residency has thirty days within which to register the vehicle within the state. At the time of registration, the owner must be able to produce proof of a valid car insurance policy. For these purposes, the Insurance ID card, a letter from the agent, or a policy binder is considered sufficient proof. There’s no need to register a vehicle if it has been listed for non-operation, e.g. because the owner is going out of the state and will not be using it, or because repairs are necessary but the owner cannot immediately afford them. Registration can also be canceled if the vehicle is totaled or stolen. Otherwise, it’s assumed the owner will maintain continuous registration while the vehicle is being used on the public roads.


The state runs a compulsory electronic reporting program for all the auto insurance companies licensed for operation within the jurisdiction. Every thirty days, each insurer must file a report of all new policies written, all changes and modifications to a policy, e.g. the addition or deletion of a named driver, or cancellation. This gives the state the power to compare the VIN in the vehicle database with the insurance database to identify applicants who are not insured.

What do you do when involved in an accident

As a fault-based state, Arkansas requires all drivers to carry proof of insurance so that, if there’s an accident, all the drivers involved can prove their liability cover and give details of their insurers. In the first instance, it will fall to the car insurance companies to agree which driver is at fault. If this can be agreed, the relevant insurer pays out to the claimants. But if the insurers cannot agree, the case goes to court. For these purposes, the car insurance company includes a subrogation clause in the policy. This entitles the insurer to sue or defend a claim in its insured’s name. Other than being called on to give evidence, the usual practice is for the car insurance company to run the litigation at its expense.

So, once you have established no-one is injured or called an ambulance, exchange all the details of who you are, where you live, the name of your insurer, policy number, and so on. At the earliest possible moment, give notice to your insurer of the accident and complete the accident reporting form it will provide.


In Arkansas, there’s an interesting and important variation on the usual law. Under normal circumstances, the car insurance policy only covers the owner or named driver while driving the insured vehicle. This can be extended if the policy holder or named driver drives another vehicle with the consent of its owner. This is slightly complicated because it means two insurance policies will be applicable, the policy for the car being driven and the policy for the driver. Each state has its own rues for deciding which policy apples. However, in Arkansas, the policy follows the owner or driver when he or she is a passenger in a vehicle involved in an accident. The same applies to the children of the insured even though they are in a vehicle being driven by someone else. So if there’s an accident, injured owners, named drivers and their children may be able to claim from their own policies if the coverage includes Personal Injury Protection which pays out no matter who was at fault or uninsured/underinsured protection which pays if the driver had no insurance or only had the minimum liability cover.

How much does auto insurance cost?

It’s impossible to give anything more than general guidance because the rates depend on you as an individual, your record as a driver, and the make and model you choose to drive. As an example, a recent survey ranked states on the rates for a hypothetical 40-year-old driver asking for 100/300/50 cover. The most expensive state was Michigan with an average quote of $2,541. Arkansas was the ninth most expensive with average annual rates of $1,836. If you go to the site operated by the Arkansas Insurance Commissioner, there’s an auto insurance cost comparison service for private passenger vehicles. This is an indispensable free service to give you guideline prices by which to judge the car insurance quotes when they come in.

Read also:

Car safety in Arkansas
Driving schools in Arkansas
Car accident attorneys in Arkansas