Uninsured vs. Underinsured Motorist Coverage in Arkansas

By the FigureMyTax Editorial Team · How we calculate

Arkansas requires uninsured motorist coverage unless an insured rejects it in writing, makes underinsured coverage available only if you have UM, and requires you to exhaust the other driver's liability limits before UIM pays.

Uninsured motorist (UM) coverage

Ark. Code 23-89-403 provides that no automobile liability policy may be issued for a vehicle registered or principally garaged in Arkansas without UM coverage at not less than the limits in Ark. Code 27-19-605, which are $25,000 per person and $50,000 per accident for bodily injury. The coverage does not apply if an insured named in the policy has rejected it in writing, and the rejection continues until withdrawn in writing. A buyer of higher liability limits must be offered UM up to those limits and rejects the increase in writing on the application.

Underinsured motorist (UIM) coverage

Ark. Code 23-89-209 says insureds must have the opportunity, which they may reject in writing, to buy UIM coverage. It is not available unless the insured has elected UM, and it may not be issued without UM. If issued, UIM must be at least equal to the minimum limits, and it lets you recover damages you are legally entitled to whenever the other driver's liability limits are less than your damages.

The excess rule

UIM coverage is not reduced by the tortfeasor's coverage except to the extent you would receive compensation in excess of your damages (subsection (a)(5)). In other words, it pays the shortfall, up to your UIM limit, rather than being offset limit-for-limit.

Exhaustion and the 30-day notice

Justia's Arkansas Supreme Court opinion summaries report a holding that insureds must exhaust the liability policies of all tortfeasors before receiving UIM benefits. For a tentative settlement at the other driver's limits, subsections (c) and (d) of 23-89-209 let you send your UIM insurer written notice by certified mail with documentation of your losses; the insurer then has 30 days to pay you the amount of that settlement and keep its subrogation rights. If it does not, it loses its right to the settlement proceeds and cannot refuse UIM benefits because of the settlement. If your own insurer also insures the other driver, the notice steps are waived.

Uninsured motorist property damage

Insureds buying UM bodily injury coverage must also be given the opportunity to buy UM property damage coverage, subject to a $200 deductible in most cases (Ark. Code 23-89-404).

Next steps

Stacking is a separate question, covered in our post on the statutes and Couch and the stacked versus unstacked explainer. Then use the Arkansas UM/UIM stacking calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Arkansas's rules apply to your specific case with a licensed Arkansas attorney.