Arkansas Property & Casualty Insurance License Exam — All Questions
4 questions
What are Arkansas's minimum auto liability limits for bodily injury (per person / per accident) and property damage?
- a.$100,000 / $300,000 / $50,000
- b.There is no minimum; auto liability coverage is optional
- c.$10,000 / $20,000 / $10,000
- d.$25,000 / $50,000 / $25,000✓
Under Ark. Code 27-19-605 (Motor Vehicle Safety Responsibility Act), Arkansas's minimum auto liability limits are $25,000 per person and $50,000 per accident for bodily injury, plus $25,000 for property damage (written 25/50/25). Always verify current figures with the Arkansas Insurance Department.
For settling auto injury claims, Arkansas follows which system?
- a.A federal single-payer auto injury system
- b.A system with no financial-responsibility requirement of any kind
- c.A pure no-fault system in which each driver's own insurer always pays regardless of fault
- d.A tort ('at-fault') system in which the at-fault driver's liability coverage pays the other party✓
Arkansas is a tort ('at-fault') state, not a no-fault state; however, Arkansas insurers must offer personal injury protection (PIP) as an add-on, which the applicant may reject in writing. This determines how injury claims are paid in Arkansas.
Under Arkansas law, when an insurer cancels or does not renew a personal auto or homeowners policy, it must generally:
- a.Obtain the policyholder's written consent before it may nonrenew
- b.Provide the policyholder advance written notice stating the reason, within the period fixed by state law✓
- c.Give no notice, because policies simply end at expiration
- d.Refund triple the premium as a statutory penalty
Arkansas regulates midterm cancellation and nonrenewal of personal-lines policies. Insurers must give advance written notice stating the reason within the number of days set by state law (shorter for nonpayment, longer for other reasons). Verify the exact notice periods with the Arkansas Insurance Department.
A property owner in Arkansas needs coverage on a one-to-four-family dwelling that is rented to tenants (not owner-occupied). Which policy is typically appropriate?
- a.A commercial crime policy
- b.An HO-3 homeowners policy, which fits any dwelling
- c.A personal auto policy endorsement
- d.A Dwelling (DP) policy, which is designed for rental or non-owner-occupied dwellings✓
Homeowners (HO) forms require owner-occupancy. For a rental or non-owner-occupied dwelling, a Dwelling Property (DP) policy is the standard product in Arkansas and nationwide. This national concept is applied to Arkansas risks on the exam.