What Type of Car Insurance Should I Have?

You know that you need auto insurance. How will you decide which policy is right for you and your family?

Arkansas drivers have many options when it comes to car insurance: Liability. Collision. Comprehensive. Uninsured. Underinsured. Medical Payments. The choice may seem overwhelming, but it doesn’t have to be.

We polled the attorneys at Taylor King Law to learn which types of auto coverage are essential and which you can forego. After all, our legal team negotiates with insurance companies every day on behalf of our clients; we’ve learned a thing or two about auto insurance along the way.



Liability Coverage


What is Liability Coverage?

Insurance that protects you if you’re at fault in a car accident. Liability coverage pays for the damage you caused to another person or vehicle, up to the limits set by the policy. This is the most basic type of auto insurance in Arkansas.

Do I Need Liability Coverage?

Absolutely. Arkansas law requires every driver (whether or not you own a vehicle) to carry liability insurance. It is currently the only type of auto insurance required by law in the state.

Under the umbrella of liability coverage is 1) bodily injury liability and 2) property damage liability. Arkansas sets “minimum coverage” requirements: for bodily injury liability that is $25,000 per person or $50,000 total in a wreck with multiple injured people; for property damage liability the minimum is set at $25,000 per accident. Insurance companies commonly refer to this as 25/50/25.


Top Attorney Tips

Before you select the minimum coverage by default, ask about the next tier: 50/100/50. Consider your assets and level of income in this decision.

From Taylor King: “Liability is required by law, but you should carry sufficient liability limits to protect your assets.

Michael Crowe adds, “Don’t save money in the short term to lose out big time in the long term. Increasing your coverage from the state minimums of 25/50/25 to the next tier of 50/100/50 is often more cost-effective than we might anticipate, and offers twice the asset protection.”



Comprehensive & Collision


What is Comprehensive & Collision?

If liability insurance covers only the damage you cause to other drivers, what happens to your own property damage or injuries in an accident where you were the at-fault driver? That’s where comprehensive and collision insurance comes in. Comprehensive insurance covers “non-collision” damage to your car: fire, flood, theft, vandalism, collisions with animals, hail, and much more. Collision insurance pays for damages to your car caused by collision or rollover accidents.

Do I Need Comprehensive & Collision?

Who needs comprehensive & collision insurance coverage? People who drive newer cars or are still making payments on their vehicle. If you make car payments, your bank or finance company likely requires you to carry comprehensive & collision insurance.

However, our attorneys agreed that if you drive an older car with a low cash value, comprehensive & collision might be coverage you can skip.


Top Attorney Tips

Brian Trubitt: “If you’re making car payments, your lender probably requires you to carry collision and comprehensive. This coverage can be expensive. If you have an older car, it may not be worth it.  They will never pay more than bluebook value.”

Robbie White agrees: “If you drive an older car that is functional and paid off, but not very expensive to replace on your own, you may end up paying more in premiums for collision coverage than the fair market value of what your car is worth over time, especially if you have a high deductible associated with your collision coverage.”



Uninsured/Underinsured Motorist Coverage (UM/UIM)


What is Uninsured/Underinsured Motorist Coverage?

Uninsured/Underinsured Motorist coverage protects you in cases where the at-fault driver is uninsured (no liability coverage), underinsured (their liability limits won’t cover the full cost of your bills), or in cases of “hit-and-run.”

Do I Need UM/UIM Coverage?

Who needs UM/UIM coverage? Everyone! Arkansas ranks in the Top 10 for states with high numbers of uninsured drivers. 1 in 6 people on the road in Arkansas is driving without insurance.

Rates for UM/UIM coverage vary by insurance company, but it typically makes up about 5% of your annual auto coverage costs. That’s a small price to pay for peace of mind.


Top Attorney Tips

Taylor King: “Nearly 20% of Arkansas drivers don’t have liability insurance.  If you get hit by one of them, you need Uninsured or Underinsured motorist coverage in order to be protected. Your Uninsured coverage will step into the shoes of the at-fault driver and pay your damages.  Underinsured coverage pays when the at-fault coverage limits are not sufficient to cover all your damages.”

Michael Crowe adds, “In my opinion, Uninsured/Underinsured coverage is invaluable. We cannot make negligent drivers insure against their bad acts, but we can insulate ourselves with these coverages.”



Medical Payments Coverage (Med Pay)


What is Med Pay?

Med Pay coverage insures your physical health. This optional insurance will pay for (up to) $5000 of the accident-related medical bills you incur within two years of your car wreck. Med Pay is particularly helpful because it works regardless of whether the accident was your fault or the fault of another driver. You can use Med Pay while you get treatment and recover from the accident; you don’t have to wait for an insurance settlement.

Do I need Med Pay?

While Med Pay is optional, our attorneys highly recommend this coverage to every Arkansas driver.

Our state government agrees! Arkansas law requires every insurance company to offer you the option to buy Med Pay coverage when you apply for an auto insurance policy. In fact, anyone who waives Med Pay coverage in Arkansas must sign a written statement.


Top Attorney Tips

In Arkansas, insurance companies cannot penalize you for using, applying for, or dealing with Med Pay. That means your insurance provider cannot raise your premiums or deduct points simply because you used your Med Pay coverage.

Chris Cordero adds: “Medpay may sound like a luxury, but it is not expensive. It really makes a difference when settling cases.”

From John Bridgeman: “I often meet clients who were told that they did not need Med Pay coverage because they had health insurance. With more and more providers reluctant to bill health insurance, Med Pay can help take care of medical bills. Not to mention that Med Pay in Arkansas will not raise one’s rates if the coverage is ever used, thanks to Arkansas law.”



Extra Car Insurance Tips & Advice

Our attorneys also shared their best advice on pitfalls to avoid and precautions to take when purchasing an insurance policy.


1. Read the fine print and ask questions.

“There is no dumb question when it comes to making sure you are protected.” – Rebecca Bryson

“Be sure to ask your agent whatever question comes to mind, especially if you’re not certain. Do not make assumptions. Unfortunately some agents may encourage you to forego coverage and benefits in the interest of saving you a few bucks, a risk that isn’t worth the few dollars you saved in the long run. Try to approach insurance a little differently, without having to learn by experience.” – Britt Johnson

“If you apply for coverage online, be careful if you are e-signing waivers for PIP, UM, and UIM. Arkansas law says that an electronic click is as good as a written signature and there is no one to explain to you what exactly it is you are waiving.” – Richard Bright


2. Understand that you get what you pay for.

If you think you can just afford liability coverage, ask for an estimate of what that will cost vs a policy with PIP and UM/UIM. Those add on coverages are much cheaper than liability and you might be surprised how little it will add to your total premium. – Richard Bright

“Be aware of the specific price for individual types of coverage, but also be aware that in general, cheaper policies have more exclusions and cover fewer people and situations.  That is why they are cheaper.”

“Be careful with insurance companies showing large savings with a free quote. Many times insurance agents may cut coverages to show savings. Make sure you are looking at a side-by-side comparison of the same coverage when contemplating switching insurance carriers.” – Michael Crowe


We’ll leave you with these words of wisdom from Taylor King: “Remember what insurance is really intended to do – protect your assets.  Buy high enough coverage limits to protect you and your family.”


More Car Insurance Information

To learn more about the types of coverage mentioned here, visit our other posts on buying auto insurance in Arkansas:




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