Arkansas Automobile Insurance Plan - AR AIP

If you drive in Arkansas – the “Natural” state – it may be a challenge to find auto insurance coverage if you have accumulated a number of accidents and/or motor vehicle violations. Incidents like these may cause auto insurers to consider you “high risk.” If your less-than-perfect driving record results in refusals, the Arkansas Automobile Insurance Plan (AR AIP) may be the answer. As long as you meet the eligibility criteria described below, you should receive a policy. In Arkansas, all drivers must have liability auto insurance coverage in the amounts - at a minimum - of 25/50/25.

What is the Arkansas Automobile Insurance Plan (AR AIP)?

The state of Arkansas decided to create this plan back in 1947. The idea was to insure as many drivers as possible, while fairly distributing the losses often incurred by high risk drivers across all the auto insurers in the state. All auto insurance companies in Arkansas are required to participate in the plan if they want to do any auto insurance business in the state. Any AR drivers who fit the eligibility may enter the Plan.

The AR AIP assigns drivers who enter the Plan to existing Arkansas auto insurers – it does not offer insurance policies directly. So once you are assigned to a company, you will pay your premiums to that company, not to the Arkansas AIP. The number of drivers assigned to any given company depends on the overall market share of that insurer in Arkansas. The bigger the share, the more high risk drivers they must cover in Arkansas.

The AR AIP is a sort of “last resort” for drivers. You can approach any licensed Property & Casualty insurer in Arkansas to answer questions about the Plan, and to help you apply, if appropriate.

Arkansas AIP Eligibility

In order to apply for insurance through Arkansas’s Auto Insurance Plan, you must attest on your application that you have tried unsuccessfully to find auto coverage within the last 60 days. If that’s true for you, then you can apply to the AR AIP as long as you have a valid Arkansas driver’s license and a vehicle registered in the state.

You may NOT be eligible to apply for insurance through the Arkansas AIP if:

  • You don’t apply in good faith, i.e. you omit or misrepresent something on your application that the insurer discovers 
  • You have an unpaid premium bill from a previous auto insurer in Arkansas
  • You refuse to provide requested information to the insurer

Once you pay the outstanding insurance premium, and/or provide the information requested by the insurer, you can apply to the Arkansas AIP immediately. However, if you are deemed to be applying in bad faith, the AR AIP can both refuse to insure you now AND make you wait 12 months before you apply again.

Arkansas AIP Coverage

Arkansas’s Auto Insurance Plan offers pretty much the same insurance coverages that other drivers in the state get. But they may cost you more. Once you are assigned an insurer, that assignment lasts for 3 years, as long as you remain eligible. If you become a better driver during this period, you may qualify for lower premiums from Arkansas auto insurers - you just have to get and compare quotes.

The mandatory coverage limits are shown in the table below. You may want to purchase more than the minimum coverage amounts for Bodily Injury and Property Damage, depending on what assets you have to protect. For a higher premium, you can get much higher amounts of coverage. Talk to your insurance agent about what is appropriate for your needs.

Mandatory CoverageArkansas Required Min. LimitsArkansas AIP Maximum Limits
Bodily Injury (BI) $25,000 per person/$50,000 per accident $100,000 per person/$300,000 per accident 
Property Damage (PD) $25,000 per accident $100,000 per accident

Through the Arkansas AIP you have a number of optional coverages available as well. Note that Arkansas insurers are required by law to offer some of these, and you may reject them in writing if you wish. For example, your assigned insurer must offer you Uninsured Motorist Bodily Injury coverage, at a limit that meets, but doesn’t exceed, the limit you chose for regular Bodily Injury. You may choose to reject this. According to the Arkansas Insurance Department, Uninsured Motorist coverage has two parts: uninsured motorist bodily injury (UMBI) and uninsured motorist property damage (UMPD). You may purchase the bodily injury without getting the property damage coverage. However, in order to buy the property damage coverage, you must first get the bodily injury coverage. Ask your Arkansas insurance agent to explain any parts of your policy that may seem confusing.

Optional CoverageArkansas AIP Min. LimitsArkansas AIP Maximum Limits
PIP - Medical Payments Coverage/Work loss/Acc death $500 per person / accident $5,000 per person / accident
Uninsured/Underinsured Motorist Bodily Injury $25,000 per person / $50,000 per accident not to exceed your BI limits
Uninsured/Underinsured Motorist Property Damage $25,000 per accident not to exceed your PD limits
Physical Damage (Collision and Comprehensive) actual cash value of your car no more than $35,000

Again, there are multiple levels of coverage that you may buy, and the cheapest coverage is not always the best (for more info on how much you should get). Be aware that if you choose Physical Damage coverage (Comprehensive and Collision), you may specify which deductible to pay in case of an accident: $100, $250, or $500. This is the amount you would pay out of your own pocket before this part of your insurance kicks in. One way to lower this part of your premium is to choose a higher deductible.

AR AIP Premiums and Payment Plans

The Arkansas Insurance Department doesn’t say how much more costly insurance premiums are for drivers who are assigned through the AR AIP. But as a general rule, drivers in any “assigned risk” plan pay more than the average rate in the state. It’s useful to understand the factors that Arkansas insurers consider when they price your policy, so that you may take actions over time to reduce your premiums.

Your assigned insurer in Arkansas will provide 2 ways to pay your insurance premium. The first way is to pay the entire annual premium at the same time you submit your application to the Arkansas AIP. That way you are paid up for the first year. There is also the option to pay 40% of the annual premium at the time of your application, and the remaining balance within 60 days of receiving the bill for the rest of the premium. Remember, your payment goes to you assigned insurer, not to the AR AIP.

In the happy event that you manage to find cheaper auto insurance with an insurer in the voluntary market in Arkansas, you will receive a prorated refund of your premium from your assigned insurer, as soon as you notify them of the cancellation. 

How to Apply for the Arkansas Automobile Insurance Plan

As mentioned above, any Arkansas auto insurer can talk to you about the AR AIP. 

If you’d like to know more about the Arkansas AIP, you can call the Arkansas Insurance Department at 1-800-852-5494or visit the  Arkansas Automobile Insurance Plan website: https://www.aipso.com/PlanSites/Arkansas.aspx

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