On the Arkansas Property & Casualty exam, the Personal Automobile Policy appears both as a standard ISO-style contract and as a set of Arkansas auto rules you must apply. This standalone guide reviews the policy's coverage parts, then drills into the Arkansas overlay: the 25/50/25 financial-responsibility minimums, the at-fault (tort) system with modified comparative fault, the offer-and-written-rejection rule for uninsured-motorist coverage, SR-22 filings, and cancellation/nonrenewal notice. The Arkansas-specific material is where most state credit is earned.

Policy structure (the national base)

The Personal Auto Policy (PAP) is a packaged contract organized into lettered parts:

• Part A — Liability: pays bodily injury (BI) and property damage (PD) the insured is legally liable for; the insurer provides a defense, and defense costs are paid in addition to the limit.
• Part B — Medical Payments: pays medical/funeral costs for the insured and passengers regardless of fault.
• Part C — Uninsured/Underinsured Motorists: pays the insured's injuries when the at-fault party is uninsured or underinsured.
• Part D — Coverage for Damage to Your Auto: Collision and Other Than Collision (Comprehensive), each with a deductible, settled at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions.

Limits may be written as split limits (e.g., 100/300/50) or as a Combined Single Limit (CSL). Insureds include the named insured, resident spouse, resident relatives, and permissive users. Eligible vehicles are private passenger autos, pickups, and vans not used mainly for business. That framework is national; Arkansas governs the limits and the liability environment around it.

Arkansas uses a tort (at-fault) liability system

Arkansas is an at-fault / tort state, not a no-fault state. The driver who causes a crash is financially responsible, and the injured party collects from that driver's liability coverage or by filing suit. This is why liability coverage and financial responsibility dominate Arkansas auto law.

Arkansas applies modified comparative fault. The rule to remember is the "50% bar": a claimant who is 50% or more at fault is barred from recovering anything (verify the current standard). If the claimant's share of fault is less than 50%, they may recover, but the award is reduced by their own percentage of fault. (Contrast this with pure comparative states, where even a heavily-at-fault claimant recovers a sliver, and with old-style pure contributory negligence, where any fault bars recovery.)

Financial responsibility: 25/50/25

Every Arkansas driver must show financial responsibility, usually by carrying liability insurance at or above the minimum split limits (verify current statutory figures):

• $25,000 bodily injury per person
• $50,000 bodily injury per accident (the total available for all injured persons)
• $25,000 property damage per accident

Shorthand: "25/50/25." Note that in the split-limit shorthand the middle number (50) is the total BI available per accident for all persons, while the first number caps any one person. These are statutory floors; producers routinely recommend higher limits. Driving without required coverage brings fines, suspension, and reinstatement consequences.

SR-22 financial-responsibility filings

A heavily tested Arkansas point: an SR-22 is a financial-responsibility filing an insurer files to certify that a high-risk driver maintains the required liability insurance. It is not a type of coverage and not a waiver of anything—it is proof of coverage commonly required after serious violations. If the underlying policy lapses, the insurer notifies the state.

Uninsured and underinsured motorist rules

This is a frequently tested Arkansas area, and it differs from some states:

• Uninsured Motorist (UM) coverage must be OFFERED on Arkansas auto policies. To decline it, the insured generally must reject it in writing (verify). So UM is "offered with a written rejection," rather than absolutely mandatory.
• Underinsured Motorist (UIM) is likewise generally offered; UIM applies when the at-fault driver has insurance but limits too low to cover the insured's damages, filling the gap up to the insured's UIM limit.
• UM also responds to a hit-and-run driver, and the other driver must be legally at fault for UM/UIM to respond.

Memorize the headline: in Arkansas, UM must be offered and can be rejected only in writing—do not say it is impossible to decline, and do not say it is never required to be offered.

Optional and physical-damage coverages

• Medical Payments (Med Pay) is optional and pays medical/funeral costs regardless of fault. Arkansas does not run a mandatory PIP/no-fault liability system (insurers commonly offer first-party medical/PIP-style benefits, which the insured may reject in writing — verify).
• Collision and Comprehensive (Other Than Collision) are optional but typically required by a lender. Hitting an animal is Comprehensive, not Collision.

Cancellation and nonrenewal

Arkansas regulates how an insurer may end a personal auto policy, generally requiring advance written notice before canceling or nonrenewing. The timelines are commonly cited as:

• Mid-term cancellation generally requires advance written notice (often around 30 days, with a shorter window—about 10 days—allowed for nonpayment of premium) (verify).
• After a policy has been in force a set period, mid-term cancellation is limited to specific reasons such as nonpayment, license suspension/revocation, or fraud/material misrepresentation.
• Nonrenewal at the end of the term likewise requires advance written notice so the insured can find replacement coverage.

Keep the shorter nonpayment-cancellation notice distinct from the longer ordinary cancellation / nonrenewal notice.

Required vs. optional coverages

Key Arkansas numbers to memorize

Common exam traps

• Arkansas is at-fault (tort), not no-fault. There is no mandatory PIP liability system.
• 25/50/25—the last $25k is property damage, and the middle 50 is total BI per accident; don't transpose them.
• UM is offered, not absolutely mandatory. It can be rejected in writing—don't say it can never be declined.
• Modified comparative fault: 50% or more at fault = barred (the 50% bar). Watch the exact wording.
• An SR-22 is a filing, not coverage—it certifies that required liability insurance is in force.
• UIM fills the gap up to your UIM limit minus the other driver's BI payment; it is not a separate full payout.
• Hitting an animal is Comprehensive, not Collision; liability defense costs are paid on top of the limit (national rules that still apply).

Quick recap

• The PAP's Parts A–F structure is national; Arkansas sets the limits and legal framework.
• Arkansas is a tort/at-fault state using modified comparative fault—a claimant 50% or more at fault recovers nothing (verify).
• Minimum liability is 25/50/25.
• Uninsured Motorist must be offered and can be declined only in writing; Underinsured Motorist fills the gap up to the insured's limit.
• Arkansas has no mandatory no-fault/PIP liability system; Med Pay and physical damage are optional.
• An SR-22 certifies a high-risk driver's required liability coverage, and cancellation for nonpayment uses a shorter (~10-day) notice while ordinary cancellation/nonrenewal uses a longer (~30-day) notice.