In Arkansas, “no fault” coverage refers to auto policyholders’ insurance coverage for medical expenses, disability income, and accidental death benefits. The goal of no-fault insurance is to offer benefits to a covered person who has been harmed in an automobile accident, regardless of who was at fault.
This insurance is considered to “follow the individual” in Arkansas. This means that if these benefits are included in your personal insurance policy, you can use them even if you are injured while driving or riding in another person’s car. In addition, if a person driving or traveling in your car does not have this coverage on their own policy, your coverage may apply to them. Arkansas law specifically provides that, regardless of responsibility, no fault coverage is available to you, members of your family in the car, the other driver, and anybody else wounded in the accident.
Is Arkansas a fault state?
Arkansas is a state in the United States “state of “fault” This indicates that the individual who caused the accident is also liable for the losses he or she has created. The damages and injuries suffered by the victims of the car accident will be covered by an at-fault insurance policy. If you’re hurt in an accident, you’d usually go to the police “to pay for your medical bills, lost income, and disability under a “at-fault” driver’s insurance policy.
Even if you are the one who caused the accident, a no-fault auto insurance policy will cover your expenses. To submit a claim, there is no requirement to prove fault or demonstrate liability.
If you are wounded in an accident in Arkansas, you have three options for obtaining compensation:
- If you are not at fault, your insurance company will file a subrogation claim against the at-fault driver. If you are at fault and have PIP insurance, you will be eligible to receive compensation under this coverage.
What is covered under no-fault insurance?
After an accident, regardless of who was at blame, no-fault vehicle insurance regulations oblige every driver to submit a claim with their individual insurance provider. Personal injury protection (PIP) is compulsory for all drivers in jurisdictions with no-fault legislation as part of their vehicle insurance coverage.
In its most restrictive form, the word “no-fault” refers only to state laws that provide for the payment of no-fault first-party benefits while also limiting the right to suit, a concept known as “limited tort.”
Motorists can only claim for severe injuries and pain and suffering under no-fault legislation if the case fits certain criteria. A threshold is a set of conditions that correspond to the severity of an injury. They can be represented in descriptive or verbal terms (a descriptive or verbal threshold) or in monetary terms (a monetary threshold).
Some regulations may stipulate a minimum number of days of impairment as a result of the accident. Because high-barrier no-fault systems limit litigation, they tend to lower claim costs and delays. When there is no cash “goal” for medical expenses, verbal thresholds eliminate the motivation to exaggerate claims. However, in some states, the verbal threshold has been eroded over time as a result of broad judicial interpretation of the verbal threshold language, and PIP coverage has become a target of abuse and fraud by dishonest doctors and clinics who bill for unnecessary and expensive medical procedures, inflating costs.
What states don’t have no-fault insurance?
Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah are among the 12 no-fault states in the United States. Puerto Rico, while being a US territory, has no-fault rules, so we’ve included its criteria below.
In addition to liability and PIP coverage, some states additionally require uninsured/underinsured motorist coverage to protect drivers financially in the event of a collision with an uninsured driver. Michigan has the highest liability and personal injury protection (PIP) minimums. The criteria in Puerto Rico are the simplest.
To limit the frequency of frivolous lawsuits, these states (and US territories) have enacted no-fault auto accident statutes in various forms. These states require various conditions to be met before approval to file an auto accident lawsuit is granted, whether through a verbal or monetary threshold to define the requirements needed to pursue an auto accident case. Three of these states, Kentucky, New Jersey, and Pennsylvania, have “choice no-fault” laws, which allow motorists to refuse the threshold criteria and file a lawsuit.
What is the minimum liability insurance in Arkansas?
A.Liability insurance is required for all car owners. When you are at fault in an accident, liability coverage pays for any claims. The legal minimum liability coverage is $25,000 per person for bodily injury, $50,000 per accident, and $25,000 for property damage to other people’s property. Almost every insurance provides higher coverage limits. When you apply for liability insurance, you must be given the option to purchase uninsured motorist bodily injury and property damage coverage, as well as underinsured motorist bodily injury coverage and personal injury protection coverage.
If the other driver is at fault and does not have liability insurance, uninsured motorist coverage protects you and your vehicle.
If the other driver is at fault and does not have enough insurance to cover your injuries, underinsured motorist coverage provides you with additional protection.
Regardless of responsibility, Personal Injury Protection covers pay loss, death compensation, and medical expenses.
A.Yes, for those insureds 55 and over who have successfully completed a course certified by the Office of Driver Services, the College Graduate Discount and Defensive Driver Discount are available.
Check with your agent to see if your insurance offers any other savings.
A.Probably because the insurance raised its total rates as a result of greater losses being paid out than planned.
Depending on a variety of conditions, you may obtain a lower or higher rate.
A.This varies from firm to company.
You should check with your insurance agent to see if your policy covers you, any others you might damage if you’re at fault, and the rental agency’s vehicle.
HOMEOWNERS INSURANCE
A.There are no laws in Arkansas that force you to carry homeowners insurance. If you have a mortgage on your house, however, you may be compelled to carry full coverage by your mortgage or loan agreement, or you may be in breach of your agreement. Your lending institution may be able to provide you with more information about the types of coverage you must maintain.
A.There are numerous types, but most homeowners get full coverage for all risks, including losses resulting from any unexpected or accidental catastrophe.
If your home is completely damaged, you might want to think about getting replacement cost coverage so that you can rebuild it.
Your obligation to your guests is normally covered under the all-risks policy.
Other types of home insurance only cover fire and natural disasters.
Some are specifically built for tenants.
Q.Can insurance companies use my credit information to deny me coverage or raise my premium?
A.An insurance firm may use credit IN THE PROCESS OF DETERMINING IF AND HOW MUCH COVERAGE WILL BE PROVIDED.
A consumer brochure on the use of credit in house and vehicle insurance is now available.
This publication, “Understanding How Insurers Use Credit Information” provides information on Act 1452 of 2003 and its impact on the use of credit information in underwriting and rating for homeowners and personal automobile insurance.
A grade based on a fire district’s equipment, people, water supply, and other considerations.
The classifications range from 1 to 10, with 10 indicating a remote location with limited fire protection.
A.The Insurance Services Office, or ISO, inspects and classifies municipal fire departments.
A.In general, the base premium is lower the lower the protection class rating. You can get in touch with your local fire department and inquire about their services “Classification of public protection according to ISO.”
Replacement cost does not allow for depreciation in assessing how much to pay you on your claim, whereas A.ACV does.
A.You might want to get in touch with your agent.
You can also read your policy’s loss settlement provision.
INSURANCE PREMIUMS
No, that is a common misunderstanding about the Department’s rate-setting authority. Insurers must file proposed rate changes with the Arkansas Insurance Department at least twenty (20) days before the effective date. We have extensive jurisdiction to look at how the rate is allocated among insureds based on criteria that could forecast future losses, but we can’t reject an overall rate unless it’s actuarially sound “excessive, insufficient, or discriminatory.”
“Excessive.
When the loss ratio (losses divided by premiums paid) declines to a point where the insurance company earns an excessive amount of profit, the rate becomes excessive.
“Inadequate.
A rate is insufficient if it will cause immediate solvency issues or if it has the potential to cause long-term solvency issues by failing to provide sufficient funds to pay future claims, as well as the costs of modifying those claims and maintaining the firm.
“Injusticed Discrimination.”
Every type of insurance makes a distinction between different types of risks.
There is one “Fair” discrimination, i.e. “legal” discrimination, and “unfair” discrimination, i.e. “illegal” discrimination.
In some risk categories, cross-subsidies encourage risky conduct.
As a result, allocating premiums among risks has the effect of discouraging hazardous conduct. “Discrimination that is “unfair” indicates that equivalent risks are not treated equally in terms of prices and coverages.
A.We look at insurance rates for life, health, private passenger auto, homes, workers’ compensation, and professional liability.
WORKERS COMPENSATION
Q.How does the Arkansas Insurance Department handle worker’s compensation claims and issues?
A.The Arkansas Insurance Department’s role is limited to authorizing the rates and forms used by insurance providers to cover the employer.
We have no role in determining whether or not a claim is covered by workers’ compensation.
The Arkansas Workers’ Compensation Commission is in charge of this.
HEALTH INSURANCE
A.A pre-existing ailment is one that you had before you bought health insurance, such as cancer, regardless of whether you were diagnosed or treated for it before you bought it. Health insurers may refuse to cover your pre-existing conditions.
Q.Can my health insurance company refuse to cover me because of my pre-existing conditions?
Pre-existing conditions can always be excluded if you acquire an individual health insurance policy. Pre-existing conditions can only be excluded from group health insurance policies if the following requirements apply:
- The pre-existing condition exclusion refers to a mental or physical condition for which medical counsel, care, or treatment was advised or obtained within the six months preceding the enrollment date (employment date).
- After the enrollment date, the exclusion cannot extend longer than 12 months (or 18 months for a late enrollee); and
- Creditable coverage must be used to lessen the exclusion period.
- Creditable coverage includes practically any type of coverage the person had before to enrolling in the current coverage, with the exception of workers compensation, liability insurance, and any of the excluded benefits specified in Ark Code Ann. 23-86-310.
- However, earlier coverage does not count as creditable coverage if a person gets coverage followed by a 63-day hiatus!
- As an example, imagine someone had coverage for two years, then had a 70-day hiatus before returning to coverage for eight months.
- That person would only be granted credit for 8 months of coverage; no credit would be given for the two years of coverage prior to the 70-day interruption.
A.No, in a group health plan; yes, in a personal policy. If you’re buying an individual policy, always include a maternity rider if you think you could get pregnant!
Q.A firm I’ve never heard of has given me a health insurance policy.
The interest rate is really cheap, and this appears to be too good to be true!
Should I purchase it?
In recent years, unauthorized health insurance has become a major issue in Arkansas.
Hundreds of Arkansas residents have purchased insurance from companies they believed were real, only to be left with unpaid medical claims totaling thousands of dollars.
Always remember that if anything appears to be too good to be true, it most often is!
If you have any questions about an insurance product you’ve been offered, call the Arkansas Insurance Department.
We can double-check that both the insurance company and the agent selling it are fully licensed.
Here are some more red flags:
- If a licensed insurance salesperson tries to offer you health insurance under the guise of an ERISA plan, be wary.
- If the plan doesn’t have any exclusions for pre-existing conditions, be wary.
- Look into offerings that don’t use the word “The term “insurance” or the use of insurance jargon.
- Keep an eye out for words like “consulting fees” (rather than commissions) and “contributions” when referring to payments.
- If a company fails to disclose the name of the carrier for a product that claims to be “completely insured” or “totally paid,” be cautious.
- Examine a corporation to see if enrollees are obliged to join and pay dues to an organization “In order to acquire health insurance, you must join a “association.”
The “Any Willing Provider Law” in Arkansas allows people in group or individual health plans or HMOs to visit any doctor or hospital they want, as long as the doctor or hospital agrees to the terms and conditions of the health insurer or HMO.
Q.How long does it take for a health insurance company to pay a claim?
A.If you or your medical provider submit a claim electronically, health insurance companies, including HMOs, have 30 days to pay you or your medical provider. If the claim is mailed to the health insurance company, it has 45 days to settle the claim. All of these timeframes are based on the assumption that the claim is a “clean claim,” or one that falls squarely within the health plan’s coverage and requires no additional information from the health insurer to process. If the claim is not “clean” or the health insurer requires additional information to process the claim, the health insurer has 30 days to collect the information. Once the health insurer has received all of the required information, the 30 (electronic) and 45 (non-electronic) day payment rules apply.
Yes, see ACA 23-85-137 and ACA 23-86-118, as well as Rule and Regulation 1. It’s a benefit on an insurance that covers standard pregnancy-related expenses. It does not apply to HMOs or plans that are self-insured.
Q.Is a newborn automatically covered by an insurance policy in what circumstances?
A.According to ACA 23-79-129, a baby must be covered for at least 90 days after birth if the insured has a policy (individual or group) that covers the insured and at least one family member (spouse or child).
If an insured has an individual policy or certificate with no dependents, the newborn will almost always have to go through underwriting unless contract language states otherwise.
Q.Can a medical practitioner submit a complaint with the Department about a health insurer or HMO’s sluggish payment issues?
A.Yes. The Department, on the other hand, requires that the medical provider give evidence in the complaint that the health insurer or HMO has a “pattern of late payment” practices.
Q.Does Arkansas have any regulations or rules governing the use of age and gender as underwriting criteria?
A.Yes. The Arkansas Trade Practices Act, Ark. Code Ann. 23-66-206, shall be taken into account by an insurer. However, if the purported discriminator proves that age and gender are significant factors in underwriting, an insurer is not forbidden from utilizing them as a criterion to charge different rates to different consumers.
EXTERNAL REVIEW
A.An independent examination of benefit claims (treatments or services) to determine if they are medically required or experimental/investigational. For external evaluation to be considered, the requested benefit must be at least $500.
A.You may be eligible for accelerated external review, in which a decision is made as soon as possible after the IRO receives your request for external review, but no later than 72 hours.
A.Every health insurance plan, with the exception of specific disease, limited supplement benefit, long-term care insurance, self-insured plans, CHIP pool, Medicare, WC, or automotive med pay.
(See Section 1 E for more information.)
A.You can then file a lawsuit.
Both the health insurer and the person who is covered have the option of going to court.
A.The individual covered by the health insurance policy and/or the authorized representative of that person. The following are examples of “authorized representatives”:
- A person who has been given express written permission by a covered person to represent the covered person in an external review;
- A person who is legally authorized to provide substituted consent on behalf of a covered person; or
- When the covered person is unable to grant consent, a family member of the covered person or, if a family member is unavailable, the covered person’s treating health care provider.
A.A Department-certified independent review organization (“IRO”). It is unaffected by the insurance company or the person who is covered.
A.After your application for treatment or services, which must be worth at least $500, was refused as not medically required or experimental/investigational. Before requesting an external review, you must usually exhaust your health carrier’s internal appeal process.
A.After you receive an initial denial or a final denial (after the carrier’s internal appeals process is completed), you have sixty days to appeal.
A.This information should be included in your health insurance coverage.
In addition, if your health insurer initially declines payment for your claim as not medically necessary or experimental/investigational, it is expected to inform you of your entitlement to an external review.
Most carriers have an internal appeals process, and if your claim is still refused after that, your carrier must inform you of your entitlement to external review once more.
A.This information will be provided to you by your health insurer in your policy and after your claim has been refused.
A.Within 45 calendar days after receiving the request for external review by the IRO.
An expedited review is done as soon as possible after the IRO receives the request for expedited review, but no later than 72 hours after the IRO receives the request for expedited review.
Q.Why is external review limited to claims that have been refused as neither medically essential or experimental/investigational?
MISCELLANEOUS
A.Yes. You may check if someone selling PEO services has a valid license to sell those services by using our Company Search database. You can also obtain a comprehensive list of every licensed PEO operating in Arkansas.
A.None.
The license was renamed a Professional Employer Organization license in 2003, after it was previously known as an Employee Leasing license.
The definition of what these businesses were did not alter.
A.Yes.
The Arkansas Earthquake Authority Act of 1999 resulted in the creation of a Market Assistance Program (MAP). The MAP is intended to help people who can’t find residential earthquake insurance through usual channels. You can get more information by calling 1-800-852-5494.
If your firm does not offer earthquake coverage on homes policies, it must inform you and give you with information on how to get coverage through the MAP.
A.High-risk pools are intended to provide coverage to clients who are unable to obtain coverage on the open market. The Arkansas Insurance Department’s Property and Casualty Division oversees residual or assigned risk policies for workers’ compensation and vehicle insurance. Fire insurance is also provided through a Rural Risk Underwriting Association, which offers coverage for structures in rural locations when the voluntary market does not provide coverage. For further information, contact your insurance representative.
Q.What does “Surplus Lines” mean, and when can I buy insurance from one?
A.When licensed insurers refuse or are unable to offer needed coverage, a qualified surplus line broker can help you find coverage with an approved surplus line insurer. Individuals and businesses can purchase insurance directly from a non-admitted insurer. This insurance is referred to as “self-procured.” If surplus lines coverage is required, your agent can assist you.
Is the Arkansas Insurance Department responsible for licensing or regulating premium finance companies?
Q.Are producers allowed to charge insureds fees in addition to the gross premiums charged by carriers on policies provided to them?
A.In general, Ark. Code Ann. 23-66-310 permits a producer to charge a fee in excess of the premiums if the following conditions are met:
A.It is debatable.
You may do so if you are related to someone in ways that are legal.
If you own real estate or personal property, such as a car or boat, you can. If your company views you as an important officer, director, or manager, it may purchase a life insurance policy on you to benefit the firm.
Anyone wanting to insure other people or property must have a “insurable interest” at the time the insurance contract is signed and, in some cases, at the time the loss occurs.
The law can be found in Ark. Code Ann. 23-79-103 (for insurance interests in people) and 23-79-104 (for insurance interests in property) (for insurance interests in property).
Q.What is the “Valued Policy” law on total building and real property fire losses?
A. Arkansas Code Ann. 23-88-101, the valuable policy statute, covers damages on real property, such as a house, from fire and natural catastrophes.
Essentially, the valued policy legislation states that, barring an insurer defense such as arson or other insurance fraud, the insurer for a total loss of real property owes the whole face amount of the policy (total policy price in $ dollars) without depreciation or challenging the value.
Under Ark. Code Ann. 23-88-102, insurance companies in rural areas must pay rural volunteer fire fighter claims first, before paying the homeowner, if the homeowner has not paid its rural district fire association dues on time.
The valuable policy law does not apply to the following:
- Appurtenant structures are those that are apart from the main structure. To cover these other structures, speak with your insurance provider or carrier about a rider or endorsement.
A. Insurance binders are short-term insurance plans issued by insurance producers, though they can also be obtained directly from the insurance company. However, not every agent or producer is authorized to provide a binder or short-term policy by the insurance carrier. Request documentation from the agent or producer demonstrating that he or she has complete power and that the insurer will adhere to the conditions of the binder. In 90 days or less, the binder must be replaced with a full policy, which must match (or not conflict with) the entire policy when the consumer receives it.
Q.I have a funeral facility with whom I have a prepaid funeral contract. I’d like to change funeral homes and transfer the funds I paid the previous one to the new one. Is it possible to cancel my contract with the first funeral home and transfer the funds to the new one?
A.Yes, as long as you signed the prepaid funeral contract before July 1, 1995. You must inform the first funeral home that you want to transfer your prepaid monies to a different funeral home (the new funeral home). The original funeral house is required by law to transmit all of the proceeds to the new funeral home, less the interest you paid down to fund the contract.
Q.Do state or federal Do Not Call regulations apply to the insurance industry and its agents?
The Federal Communication Commission’s (FCC) Do-Not-Call Rule extends to the insurance business, unlike the Federal Trade Commission’s Do-Not-Call Rule. Even in states that have exempted insurance agents from their do-not-call legislation (like Arkansas! ), insurance agents who use the phone or send faxes will be required to follow the FCC’s Rule and check the national do-not-call list. Though an agent has a “established commercial connection” with a customer, even if the client has put his or her name on the do-not-call list, the agent is still permitted to call the client at home. A client has an established commercial relationship if they have made a purchase or entered into another transaction during the last 18 months, or if they have made an enquiry or application within the last three months. Nonetheless, “cold” calls to numbers on the Do-Not-Call list are banned unless the caller has received express written permission to do so.
Since October 1, 2003, companies must comply with the FCC’s Do-Not-Call Telemarketing Rule.
A Do-Not-Fax Rule went into effect on January 1, 2005.
In addition, the National Association of Insurance and Financial Advisors and the American Council of Life Insurers (ACLI) filed a joint filing with the FCC in November 2003, requesting that the FCC define the definition of “established commercial connection” under the do-not-call laws.
The Department urges you to contact the FCC directly to inquire whether the federal law’s applicability to intra-state phone conversations, i.e., calls made within the state only between an AR producer and an AR customer.
According to the Department, there is some disagreement about whether the prior state-exception for insurance applies under the new Do Not Call laws.
http://www.fcc.gov/contacts.html is the FCC’s website and contact information.
Q.What is covered by the Guaranty Fund if a company offering long-term care insurance goes bankrupt?
A.The coverage amount would be $300,000 or the policy limits, whichever is lower.
The policies that aren’t in the middle of a claim would be sold to a financially stable insurance firm.
The policyholder would be informed of this, receive a certificate from the assuming business, and instructions on how to send premium payments, inquire about claims, and so on.
The guaranty fund would pay on the policy until the limit of coverage was reached if it was in claim status.
Q.I’m covered by a Union Life Insurance Company policy.
Can you tell me who is in charge of this policy and who I should contact to inquire about it?
A.Jefferson National Life Insurance Company merged with Union Life Insurance Company in 1990.
Jefferson National was later absorbed by Great American Reserve, which was thereafter absorbed by Conseco Life Insurance Company.
The life insurance business of Union Life was transferred to Conseco Variable Insurance Company.
In order to service the Union Life business, Conseco Variable Insurance Company changed its name to Jefferson National Life Insurance Company and entered into an agreement with Protective Life Insurance Company of Birmingham, Alabama. To speak with a customer care representative, dial 1-800-866-3555. When requesting information about your policy, start with the letters KK and then your original policy number.
A.No.
In most cases, insurance coverage follows the vehicle rather than the person.
Licensed automobile dealerships, however, are exempt from this requirement under Ark. Code Ann. 27-19-713(l); they are not required to hold primary insurance coverage on every vehicle in their lot under this statute. This law relieves dealerships of the burden of insurance by expanding the insured’s coverage to situations in which the dealership lends the insured a car.
Is Arkansas a tort state?
Arkansas, unfortunately, is not a no-fault state. Arkansas is a tort state, which means that after an accident, the at-fault driver’s liability insurance pays for other people’s medical claims and repair costs up to the policy limits. Although Arkansas drivers can acquire personal injury protection (PIP) insurance to cover their own injuries in the event of an accident, the state does not limit their right to sue an at-fault driver for damages. As a result, Arkansas is classified as a tort state, also known as a “add-on” no-fault state.
You can enjoy the rapid payout of a no-fault state while still being able to sue the at-fault motorist for your expenditures, including pain and suffering, in tort states like Arkansas that allow drivers to purchase PIP. You’ll have to wait for blame to be decided before the at-fault driver’s insurance company will cover your medical expenditures if you don’t have PIP.
How long does an insurance company have to settle a claim in Arkansas?
After a claim is made in Arkansas, insurance firms have 45 working days to settle it. Before paying out the ultimate payment, Arkansas insurance companies must notice the claim and decide whether or not to accept it within a certain timeframe.
Why no-fault insurance is bad?
- Insurance premiums are higher in no-fault states than in tort states because greater coverage is necessary and fraud is more common.
- Drivers in no-fault states have limited legal alternatives and can only sue the at-fault motorist if they are seriously hurt or incur significant expenses.
- Fewer fines for at-fault drivers: When negligent drivers hurt someone in a collision, they face a lower insurance penalty.
- No-fault states have a greater rate of road fatalities than tort jurisdictions.
Will my insurance go up if I am not at fault?
In most cases, a no-fault accident will not result in an increase in your vehicle insurance rates. Because the at-fault party’s insurance company will be responsible for your medical bills and vehicle repairs, this is the case. Your premiums will not increase if your insurer does not need to make a payment.
If your rates do go up as a result of a no-fault accident, you should be aware that various insurers increase rates in different ways. Some companies may increase your premiums by 10%, while others may just increase them by 2%. Furthermore, several states, including as California and Oklahoma, prohibit insurance companies from raising rates following a non-fault claim.
Which states have an option in addition to being no-fault states?
Drivers in a choice no-fault state can choose between no-fault insurance and the more standard tort liability insurance plan. Kentucky, New Jersey, and Pennsylvania are currently regarded choice no-fault states.