Arkansas law requires that every person operating a motor vehicle on the streets and highways have liability insurance coverage. The minimum required limits are $25,000 per person, and $50,000 per accident. All drivers must carry proof of insurance with them in their cars. A driver can be ticketed, and a car can be impounded-that is-towed away, if the driver cannot produce proof of insurance. That does not mean that there are no uninsured cars on the streets of Arkansas. In spite of vigorous enforcement efforts by the police and courts, there are still far too many uninsured cars on the road.
Purpose of Liability Insurance
Liability insurance is required to protect other people on the street. The minimum limits required by Arkansas law may seem high, but in reality, they are often not adequate. Any driver who negligently causes an accident can be responsible for all damages caused by the negligence. This includes not only damage to the other vehicle, but damages for personal injury of others injured in the accident. Personal injury damages include medical expenses, lost wages, and compensation for pain, suffering, and mental anguish. An automobile is a dangerous machine, and motor vehicle accidents often cause damage in excess of that covered by the minimum limits of liability coverage.
If you do not have enough insurance to cover damages caused by the accident, you can be liable for any additional money you owe. For this reason, we recommend that all drivers discuss their insurance liability limits with an insurance agent. If you have a good driving record, the additional cost of much greater coverage can be surprisingly small.
No-Fault Coverage
Now that you have protected everyone else on the highway, you need to think about yourself. Under Arkansas law, your insurance company must offer you "no-fault" coverage and uninsured and underinsured motorist coverage. Some insurance agents suggest that you turn this coverage down to save money. I do not recommend that.
No fault coverage includes medical payments, income disability benefits, and accidental death benefits. In general, these benefits are paid by your insurer to you and people in your car in the event of an accident. Here the minimum limits are even smaller. The minimum limits are $5,000 each in medical and death benefits, and $140 per week or 70% of your salary (whichever is less) in lost income benefits. Your insurer pays these benefits "without regard to fault." If you are injured as a result of someone else's negligence, you can sue that person, but you must pay the no-fault benefits back to your insurer when you collect from the person at fault. The good thing about "no-fault" benefits is that they will make it possible for you to seek immediate medical attention without the provider having to worry about whether you can pay for the services. For additional information, please see the article entitled "No Fault Coverage in Arkansas" on this site.
Remember that in spite of the law, there are uninsured vehicles on the road. Unfortunately, the same people who ignore mandatory insurance laws often ignore other laws as well, such as those requiring drivers to drive safely and carefully. If you are injured by an uninsured driver, it is often not realistic to expect the uninsured driver to pay your damages out of his or her pocket. That is why uninsured motorist coverage is necessary. The uninsured motorist coverage on your insurance policy will pay up to your coverage limits in the event you are injured by an uninsured driver. For the same reason that the minimum liability limits may not be adequate, the minimum uninsured motorist limits may be inadequate. You can buy uninsured motorist coverage up to the same limits you have purchased to cover your own liability.
In the event of a serious accident, if you are injured through the fault of a person who does not have adequate insurance to cover your losses, your only hope may be your underinsured motorist coverage. Underinsured motorist coverage can be used when your damages are more than the insurance coverage provided by the person that hit you. Again, since in these times $25,000 may not be enough to compensate a person seriously injured in a motor vehicle accident, I suggest that you not reject this coverage.
Conclusion
A motor vehicle accident could seriously disrupt your life. If you plan to drive a car in Arkansas, be sure to buy enough coverage to protect yourself and your family. Ask your insurance agent about purchasing higher than minimum limits on your policy. You may be surprised at how inexpensive it would be to increase your family's protection