3.1 Arkansas Auto Insurance Requirements

Arkansas Property & Casualty Insurance State

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1 Standalone Coverage Map

Standalone Coverage Map

2 Introduction: Arkansas Property & Casualty Insurance Exam Overview

Arkansas Property & Casualty Exam Overview

3 National Portion: Insurance Fundamentals

1.1 Risk, Hazards, Perils, and the Law of Large Numbers 1.2 Insurable Interest, Indemnity, and Other Insurance Principles 1.3 Insurance Contract Law and Elements 1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions 1.5 Parties, Agents vs. Brokers, and Authority

4 National Portion: Property Insurance Concepts

2.1 Causes of Loss / Named-Peril vs. Open-Peril 2.2 Valuation: ACV, Replacement Cost, and Functional Value 2.3 Coinsurance and the Coinsurance Formula 2.4 Deductibles, Limits, and Loss Settlement 2.5 Common Property Policy Conditions and Clauses

5 National Portion: Dwelling Policies (DP)

3.1 Dwelling Policy Forms DP-1, DP-2, DP-3 3.2 Dwelling Coverages A-E and Other Coverages 3.3 Dwelling Perils, Conditions, and Endorsements 3.4 Mobile Home and Specialized Dwelling Coverage

6 National Portion: Homeowners Policies - Forms & Section I

4.1 Homeowners Forms HO-2 through HO-8 and Eligibility 4.2 Section I Coverages A-D and Additional Coverages 4.3 Section I Perils Insured Against and Exclusions 4.4 Replacement Cost vs. ACV and Loss Settlement in Homeowners

7 National Portion: Homeowners Policies - Section II & Endorsements

5.1 Section II Coverages E (Liability) and F (Medical Payments) 5.2 Homeowners Conditions and Duties After Loss 5.3 Common Homeowners Endorsements (scheduled property, water backup, ordinance or law)

8 National Portion: Personal Auto Policy - Liability & Injury

6.1 Personal Auto Policy Structure and Eligibility 6.2 Part A Liability and Supplementary Payments 6.3 Part B Medical Payments 6.4 Part C Uninsured/Underinsured Motorists

9 National Portion: Personal Auto Policy - Physical Damage & Duties

7.1 Part D: Coverage for Damage to Your Auto 7.2 Exclusions and Part E: Duties After an Accident 7.3 Part F: General Provisions, Endorsements, and No-Fault Concepts

10 National Portion: Liability Insurance Concepts

8.1 Negligence, Torts, and Legal Liability 8.2 Defenses, Damages, and Vicarious Liability 8.3 Occurrence vs. Claims-Made Triggers 8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury

11 National Portion: Commercial Property Insurance

9.1 Commercial Package Policy Structure and Common Policy Conditions 9.2 Building and Personal Property Coverage Form (BPP) 9.3 Causes of Loss Forms (Basic, Broad, Special) 9.4 Business Income and Extra Expense 9.5 Commercial Property Endorsements and the BOP

12 National Portion: Commercial General Liability - Coverages

10.1 CGL Coverage A: Bodily Injury and Property Damage Liability 10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments 10.3 Who Is an Insured and Supplementary Payments

13 National Portion: Commercial General Liability - Limits, Triggers & Exclusions

11.1 CGL Limits of Insurance and Aggregates 11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates 11.3 Key CGL Exclusions and Endorsements

14 National Portion: Commercial Auto Insurance

12.1 Business Auto Coverage Form and Covered Auto Symbols 12.2 Commercial Auto Liability and Physical Damage 12.3 Motor Carrier / Trucking and MCS-90 12.4 Garage Coverage Form and Garagekeepers 12.5 Commercial Auto Endorsements

15 National Portion: Workers Compensation

13.1 Workers Compensation Statutory Background and Benefits 13.2 Part One (Workers Comp) and Part Two (Employers Liability) 13.3 Premium Basis, Experience Modification, and Classification 13.4 Other States, USL&H, and Federal Acts 13.5 Workers Comp Exclusions and Endorsements

16 National Portion: Other Commercial Lines - BOP, Crime & Marine

14.1 Businessowners Policy (BOP) in Depth 14.2 Crime and Fidelity Coverage 14.3 Inland Marine and Nationwide Marine Definition 14.4 Ocean Marine Coverages (Hull, Cargo, Freight, P&I)

17 National Portion: Other Commercial Lines - Specialty & Professional

15.1 Farm and Agricultural Coverage 15.2 Commercial Umbrella and Excess Liability 15.3 Professional Liability and Errors & Omissions 15.4 Directors & Officers and Employment Practices Liability

18 National Portion: Other Commercial Lines - Surety, Flood & Specialty

16.1 Surety and Fidelity Bonds 16.2 National Flood Insurance Program (NFIP) 16.3 Cyber, Aviation, and Other Specialty Lines

19 National Portion: Insurance Regulation & Market Conduct

17.1 State Regulation, Licensing, and the McCarran-Ferguson Act 17.2 Rates, Forms, Solvency, and Guaranty Associations 17.3 Producer Authority, Fiduciary Duty, and Company Operations

20 National Portion: Ethics & Unfair Trade Practices

18.1 Unfair Trade Practices and Unfair Claims Settlement 18.2 Producer Ethics, Errors & Omissions Exposure, and Fiduciary Conduct 18.3 Privacy, Fraud, and Consumer Protection

21 Chapter 1: Arkansas P&C Insurance Regulation & Licensing

1.1 Arkansas Insurance Department 1.2 Arkansas P&C Producer Licensing Requirements 1.3 Arkansas Producer Responsibilities

22 Chapter 2: Arkansas Property Insurance

2.1 Arkansas Homeowners Insurance 2.2 Arkansas Commercial Property Insurance

23 Chapter 3: Arkansas Casualty & Auto Insurance

3.1 Arkansas Auto Insurance Requirements 3.2 Arkansas Liability Insurance 3.3 Arkansas Workers' Compensation Insurance

24 Chapter 4: Arkansas Ethics & Professional Conduct

4.1 Ethical Practices and Consumer Protection

3.1 Arkansas Auto Insurance Requirements

Key Takeaways Explain This Topic AI

Arkansas requires minimum liability limits of 25/50/25 ($25,000 bodily injury per person, $50,000 per accident, $25,000 property damage).

Uninsured Motorist (UM) and Personal Injury Protection (PIP) must be offered and are included unless the insured rejects them in writing.

Arkansas is a tort (at-fault) state and applies modified comparative fault with a 50% bar to recovery.

The Online Insurance Verification System (OIVS) lets law enforcement and the DMV electronically confirm coverage in real time.

Driving uninsured triggers fines, registration/license suspension, reinstatement fees, and a potential SR-22 financial responsibility filing.

Last updated: June 2026

Minimum Financial Responsibility: 25/50/25

Arkansas Code 27-19-713 sets the minimum liability limits every private passenger auto policy must provide. On the exam these are tested as the three-number shorthand "25/50/25."

• Coverage part Minimum limit What it pays
• Bodily Injury (BI) per person $25,000 Injury to one other person
• Bodily Injury per accident $50,000 Total injury to all others in one crash
• Property Damage (PD) $25,000 Damage to another's car/property

These limits have not changed for 2026 . A common distractor is 15/30/10 or 20/40/15 — those belong to other states. Liability pays for damage the insured causes to others ; it never pays for the insured's own car (that is collision/comprehensive, which are optional).

Mandatory Offers: UM and PIP

Arkansas does not make UM and PIP purely optional; insurers must offer them, and they attach automatically unless the insured rejects them in writing .

Uninsured/Underinsured Motorist (UM/UIM)

Bodily Injury UM is required to be offered at limits equal to the liability limits.

Pays when the at-fault driver has no insurance, too little, or flees (hit-and-run).

A written rejection is needed to drop or reduce it.

Personal Injury Protection (PIP) — "no-fault medical"

Arkansas PIP is add-on , not true no-fault — the insured keeps the right to sue. Minimum PIP components Arkansas insurers must offer:

• PIP component Minimum
• Medical/hospital $5,000
• Income (work loss) 70% of lost wages, up to $140/week, 52 weeks
• Accidental death $5,000

PIP pays the insured and passengers regardless of fault . The exam loves this trap: PIP medical is rejectable in writing, but if not rejected it is primary for the insured's own injuries.

Tort System and Comparative Fault

Arkansas is a tort (at-fault) state — the at-fault driver's insurer pays the injured party. It applies modified comparative fault with a 50% bar (Ark. Code 16-64-122): a claimant who is 50% or more at fault recovers nothing ; below 50%, recovery is reduced by the claimant's fault percentage.

Example: $40,000 in damages, claimant 20% at fault -> recovers $32,000.

Example: $40,000 in damages, claimant 50% at fault -> recovers $0.

Proof of Coverage and OIVS

Drivers must carry proof (paper or electronic phone display) and show it on demand.

Arkansas runs an Online Insurance Verification System (OIVS) ; insurers report active policies so police and the DMV can confirm coverage instantly.

A lapse flagged by OIVS can suspend the registration , not just charge a fine.

Penalties for Driving Uninsured

• Offense Consequence
• 1st offense Fine $50-$250, registration suspended until coverage proven
• 2nd offense Fine $250-$500, suspension, reinstatement fee
• 3rd+ offense Fine up to $1,000, longer suspension, possible plate seizure

A serious violation can require an SR-22 — a certificate the insurer files with the state proving the driver carries at least minimum coverage, typically for 3 years .

Underinsured Motorist (UIM) and Stacking

Arkansas treats Underinsured Motorist (UIM) as a distinct coverage that the insurer must also offer. UIM applies when the at-fault driver carries liability limits lower than the injured insured's damages but is not entirely uninsured. For example, if an insured suffers $80,000 in injuries and the at-fault driver carries only the 25/50/25 minimum, the insured's $50,000 UIM limit can fill part of the shortfall after the at-fault insurer pays its $25,000. Like UM and PIP, UIM is included unless rejected in writing, and the rejection must be a knowing, documented choice retained in the insurer's file.

Optional First-Party Coverages

Liability, UM, and PIP protect people; the insured's own vehicle is covered only by optional physical damage coverages a producer should explain:

Collision : pays for damage to the insured's car from impact, regardless of fault, subject to a deductible (commonly $250-$1,000).

Comprehensive (other than collision) : pays for theft, fire, hail, flood, glass breakage, vandalism, and animal strikes.

Lenders almost always require both collision and comprehensive on financed vehicles; this is a frequent producer-duty scenario on the exam.

Neither collision nor comprehensive is mandated by Arkansas law, so a driver can legally carry only 25/50/25 liability and have no protection for their own car. A producer who fails to explain this gap to a financing customer creates an errors-and-omissions exposure.

Producer and Cancellation Rules

Arkansas regulates how auto policies start and end. A new auto policy may be canceled for any lawful reason within the first 60 days (the underwriting period). After 60 days, mid-term cancellation is limited to specific grounds such as nonpayment of premium, license suspension of the named insured or a regular operator, or material misrepresentation. The insurer must mail advance written notice — generally at least 20 days , or 10 days for nonpayment . Nonrenewal also requires advance notice so the insured can find replacement coverage.

These notice timeframes are heavily tested; pair "60-day underwriting window" with the 20-day/10-day notice split.

Exam Tip : Memorize 25/50/25, and remember UM, UIM, and PIP are mandatory offers that attach unless rejected in writing . "Optional" is the wrong word for AR UM/PIP — collision and comprehensive are the truly optional first-party coverages.