Ark. Code Ann. § 23-89-202 (2026)

Research References

ALR.

Comment Note: Amount in Controversy Jurisdictional Requirement under Class Action Fairness Act (CAFA). 5 A.L.R. Fed. 3d Art. 2 (2016).

Ark. L. Notes.

Copeland, A Brief Survey of Some Important 1990 Insurance Law Decisions, 1991 Ark. L. Notes 75.

U. Ark. Little Rock L.J.

Survey — Insurance, 10 U. Ark. Little Rock L.J. 217.

Chamberlin & Holt, Why Arkansas Should Overturn its Anti-Stacking Precedent: A Look at Aggregating Uninsured and Underinsured Motorist Coverage, 21 U. Ark. Little Rock L. Rev. 413.

Case Notes

In General.

This section and § 23-89-203 encompass the mandatory offering of coverage accompanied by the right to reject such coverage in whole or in part, not mandatory coverage of any and all risks. Shelter Gen. Ins. Co. v. Williams, 315 Ark. 409, 867 S.W.2d 457 (1993).

Because the Arkansas Supreme Court has previously construed § 23-89-205 to allow an insurer to avoid risks caused by the intentional misconduct of the insured and because the General Assembly failed to require no-fault coverage for injuries suffered by innocent third parties in such circumstances, the trial court also erred in ordering the insurer to pay the claimants personal injury protection benefits under Arkansas' no-fault law. Southern Farm Bureau Cas. Ins. Co. v. Easter, 374 Ark. 238, 287 S.W.3d 537 (2008).

Construction.

A rejection of no-fault insurance coverage is required when a new declaration occurs which includes a substituted automobile. Fimpel v. State Auto. Mut. Ins. Co., 322 Ark. 797, 911 S.W.2d 950 (1995).

Plain language of § 23-89-207 clearly mandates that an insurer's right of reimbursement from its insured only arises whenever“ no-fault medical benefits have been paid to the insured, pursuant to this section, ”and“ the insured has recovered in tort for injury, either by settlement or judgment. The use of the conjunctive word ”and” indicates that these criteria serve as prerequisites before an insurer shall have a right to reimbursement from its insured. Progressive Halcyon Ins. v. Saldivar, 2013 Ark. 69 (2013).

Purpose.

The intent of “no fault” insurance was to make an insured whole on relatively minor automobile injury damage claims without regard to fault or liability and without his being required to engage in expensive and extended litigation; however, the purpose was not to require the same amount of coverage to one injured by the negligence of a motorist who carries no liability insurance as would be available had the motorist had the minimum coverage necessary to meet the requirements of the Motor Vehicle Safety Responsibility Act, set out in § 27-19-605. Aetna Ins. Co. v. Smith, 263 Ark. 849, 568 S.W.2d 11 (1978).

Benefits.

In construing a policy provided in accordance with this section, the insurer cannot deduct the amount of medical payments from the accidental death benefits. Farm Bureau Mut. Ins. Co. v. Parrish, 265 Ark. 161, 577 S.W.2d 397 (1979).

Payment in excess of the actual loss does not violate this section and, thus, the stacking of benefits is not prohibited; therefore, since neither the policies involved nor this section prohibited payment in excess of actual losses and no public policy argument was made, the insurer was liable on multiple policies for which multiple premiums were collected. State Farm Mut. Auto. Ins. Co. v. Smith, 292 Ark. 614, 732 S.W.2d 137 (1987).

Since subdivision (3) mandates that all automobile liability policies include coverage for $5,000 in accidental death benefits “to be paid to the personal representative of the insured,” the natural construction of the words in a policy providing for the payment of death benefits “to any person or organization authorized by law to receive such payment” would be that they authorize payment to the decedent's personal representative, not to his heirs or distributees. Woolsey v. Nationwide Ins. Co., 697 F. Supp. 1053 (W.D. Ark. 1988), aff'd in part, reversed in part, 884 F.2d 381 (8th Cir. 1989).

Under subdivision (3), the term “personal representative” includes heirs and next-of-kin. Woolsey v. Nationwide Ins. Co., 884 F.2d 381 (8th Cir. 1989).

Like life insurance proceeds, death benefits should pass directly to the beneficiaries and should not enter the decedent's estate to become subject to claims by the decedent's creditors. Woolsey v. Nationwide Ins. Co., 884 F.2d 381 (8th Cir. 1989).

Insurer did not meet its burden of proving that the amount in controversy exceeded $75,000 for an insured's individual claim as required by 28 U.S.C.S. § 1332(a) because before including attorney's fees, the maximum amount the insured could seek was $41,754 under this section and §§ 23-89-208 and 23-89-209, and to reach $75,000, a court would need to award more than $33,000 in attorney's fees, which seemed unlikely; however, the undisputed facts showed that the value of the insurance at issue, measured by the amount that the insurer would charge for the coverages at issue, exceeded $10,000,000, and thus, the amount in controversy for class claims exceeded $5,000,000, the minimum amount for jurisdiction pursuant to the Class Action Fairness Act, 28 U.S.C.S. § 1332(d), and because the insured could not show “to a legal certainty” that the pay-out for the claims of the class would be less than $5,000,000, her motion to remand was denied. Toller v. Sagamore Ins. Co., 558 F. Supp. 2d 924 (E.D. Ark. 2008).

Trial court did not err in granting an insurer's motion for summary judgment in an insured's action to recover benefits under a no-fault medical provision because the exclusion contained in the insured's policy was valid and applied in all scenarios where workers' compensation benefits either had been paid in whole or in part or could be paid in whole or in part; because the insured was covered by workers' compensation, she was excluded from receiving medical-payments coverage under § 23-89-205. Bohot v. State Farm Mut. Auto. Ins. Co., 2012 Ark. 22, 386 S.W.3d 408 (2012).

Circuit court properly granted summary judgment in favor of an insurer on passengers' claim for medical expenses, a statutory penalty, fees, and interest related to an automobile accident; there was no ambiguity in the applicable policy language concerning “discharge” and the insurer discharged the passengers' debts through its payments. The passengers' argument failed that the policy language was against the state's public policy, as reflected in this section; there is nothing in this section that would have permitted the passengers to receive the difference between what the medical providers billed and what they accepted as full satisfaction of the debt. Crockett v. Shelter Mut. Ins. Co., 2019 Ark. 365, 589 S.W.3d 369 (2019).

Automobile insurer's payment of med-pay benefits to a medical center over the insured's objections was upheld where: the policy stated that benefits can be paid “to or for” the insured; sections 23-89-202 and 23-89-204 do not mandate payment only to the insured; section 4-58-102 allows an insured to assign the right to receive insurance proceeds, as the insured had done in this case, and the insurer was obligated by law to honor the assignment and lien; section 23-85-114(b) does not apply to automobile insurance; and there was no evidence that the insured had advised either the insurer or the medical center of a revocation of the specific assignment of benefits to the medical center. United Servs. Auto. Ass'n v. Norton, 2020 Ark. App. 100, 596 S.W.3d 522 (2020).

Though the relevant statutes mandate med-pay coverage in automobile liability insurance, they do not specify that the insured is always the sole payee, regardless of circumstances; the court of appeals declined to interpret the statutes to say that the insured and/or insurer may ignore assignments and liens. United Servs. Auto. Ass'n v. Norton, 2020 Ark. App. 100, 596 S.W.3d 522 (2020).

Choice of Law.

Where the insurance contract was entered into in Arkansas, but the accident occurred in Colorado, injury party was only allowed to recover $5,000 in no-fault medical coverage as opposed to the $50,000 in benefits allowed under Colo. Rev. Stat. Ann. § 10-4-706(1)(b) since the no-fault claim was subject to Arkansas law; however, the injured party was not precluded from recovering the remaining medical expenses from the tortfeasor under Colo. Rev. Stat. Ann. § 10-4-713(1). Southern Farm Bureau Cas. Ins. Co. v. Craven, 79 Ark. App. 423, 89 S.W.3d 369 (2002).

Common Law.

Arkansas compulsory insurance statutes have not abrogated the insurer's common law right to rescission when: (1) only the insurer and the insured are involved in a noncompulsory provision of the policy, and (2) the policy has been in existence less than 60 days, unless it is a renewal policy. Ferrell v. Columbia Mut. Ins. Cas. Co., 306 Ark. 533, 816 S.W.2d 593 (1991).

Construction of Policy.

If there is doubt or uncertainty as to the policy's meaning and it is fairly susceptible of two interpretations, one favorable to the insured and the other favorable to the insurer, the former will be adopted. Arkansas Farm Bureau Ins. Fed'n v. Ryman, 309 Ark. 283, 831 S.W.2d 133 (1992).

Coverage Permitted.

Although this section requires that minimum coverage be provided in all policies, it does not prohibit an insurer from providing broader coverage than that mandated. National Investors Fire & Cas. Ins. Co. v. Edwards, 5 Ark. App. 42, 633 S.W.2d 41 (1982).

When benefits are payable to a named insured, in the event that more than one policy has personal injury protection coverage, the insured's own policy shall provide primary coverage; thus, the applicable policy for no-fault benefits was issued by the carrier for the injured party rather than by the carrier for the vehicle in which the injury occurred. Lawson v. State Farm Mut. Auto. Ins. Co., 291 Ark. 391, 725 S.W.2d 543 (1987).

Exclusion.

Insurance policy exclusion for noncovered vehicles belonging to an insured or relatives in his household was not contrary to public policy because it was in accordance with the minimum requirements for motor vehicle insurance. Ballesteros v. Nationwide Mut. Ins. Co., 2013 Ark. App. 662 (2013).

Insured Vehicle Not Involved In Accident.

Insured was unable to collect on an insurance policy that covered a vehicle that was not involved in an accident; since the vehicle that the insured was driving was not insured by the insurer; pursuant to statute, the vehicle that the insured was driving was not covered for personal injury protection. Ballesteros v. Nationwide Mut. Ins. Co., 2013 Ark. App. 662 (2013).

Liability of Insurer.

This section does not impose liability upon the insurance carrier for work loss incurred more than 52 weeks after the accident. Glenn v. Farmers & Merchants Ins. Co., 649 F. Supp. 1447 (W.D. Ark. 1986).

It was unclear, based on the current record, whether or not a district court could assert jurisdiction under 28 U.S.C.S. § 1332(a) and (d) over a class action suit brought by an insured on her own behalf and on behalf of a class of fellow Arkansas policyholders who owned automobile liability policies issued by an insurance company. Although theoretically the amount that the insurance company would have to pay, if it was required to provide no fault coverage to all of the class members as required by this section, §§ 23-89-403, 23-89-404, and 23-89-209, would exceed 28 U.S.C.S. § 1332(d) amount in controversy requirements, there was no evidence showing how much the company might actually have to pay, as not every class member would get in an accident or be entitled to no fault benefits. Toller v. Sagamore Ins. Co., 514 F. Supp. 2d 1111 (E.D. Ark. 2007).

Occupants of Insured Vehicle.

Insureds were not entitled to the medical expense benefits that would have been payable under the coverage provisions for a second vehicle that was not involved in the accident since they could not have been occupants of both vehicles when they were hurt. Travelers Ins. Co. v. Estes, 283 Ark. 61, 670 S.W.2d 451 (1984).

Rescission.

Courts may sever compulsory provisions of an insurance policy from noncompulsory provisions and permit rescission only as to noncompulsory provisions. Ferrell v. Columbia Mut. Ins. Cas. Co., 306 Ark. 533, 816 S.W.2d 593 (1991).

Right of Setoff.

An automobile insurance carrier cannot, by policy language, set off its medical payments made on behalf of its insured to a third party against its payment for the same insured to the injured party of the policy limit for bodily injury. State Farm Mut. Auto. Ins. Co. v. Sims, 288 Ark. 541, 708 S.W.2d 72 (1986).

Subrogation.

Court erred in granting summary judgment dismissal of the claimant's action, because there was no evidence that the claimant's insurer had a valid lien on the $5200 paid by the insurance company to the claimant pursuant to the parties' settlement of the claimant's tort claim; there was no evidence that the company had obtained a judicial determination that the claimant had been made whole. Lopez v. United Auto. Ins. Co., 2013 Ark. App. 246, 427 S.W.3d 154 (2013).

Time of Coverage.

The date of the accident is the time to determine whether an insurance policy with no-fault coverage is valid and collectible. Mid-Century Ins. Co. v. Anderson, 303 Ark. 54, 791 S.W.2d 706 (1990).

Waiver.

The no-fault coverage provided by this section can be waived; a named driver exclusion cannot violate public policy when one realizes that a prospective purchaser of insurance may reject no-fault insurance altogether. Shelter Gen. Ins. Co. v. Williams, 315 Ark. 409, 867 S.W.2d 457 (1993).

Cited: Northwestern Nat'l Ins. Co. v. American States Ins. Co., 266 Ark. 432, 585 S.W.2d 925 (1979); O'Bar v. MFA Mut. Ins. Co., 275 Ark. 247, 628 S.W.2d 561 (1982); Carnathan v. Farm Bureau Ins. Co., 288 Ark. 399, 705 S.W.2d 885 (1986); Daves v. Hartford Accident & Indem. Co., 302 Ark. 242, 788 S.W.2d 733 (1990); Edens v. Shelter Mut. Ins. Co., 923 F.2d 79 (8th Cir. 1991); Baker v. State Farm Fire & Cas. Co., 34 Ark. App. 59, 805 S.W.2d 665 (1991); Shelter Mut. Ins. Co. v. Irvin, 309 Ark. 331, 831 S.W.2d 135 (1992); Shelter Mut. Ins. Co. v. Bough, 310 Ark. 21, 834 S.W.2d 637 (1992); State Farm Mut. Auto. Ins. Co. v. Brown, 48 Ark. App. 136, 892 S.W.2d 519 (1995); Dean v. Colonia Underwriters Ins. Co., 52 Ark. App. 91, 915 S.W.2d 728 (1996); Southern Farm Bureau Cas. Ins. Co. v. Allen, 326 Ark. 1023, 934 S.W.2d 527 (1996).