Arkansas is known for its extreme weather, including thunderstorms, hail, ice storms, and some of the most destructive tornadoes in U.S. history. Given the potential for property damages due to such inclement weather, Arkansas homeowners should strongly consider purchasing some kind of home insurance.
How Much Does Arkansas Home Insurance Cost?
According to the Insurance Information Institute, in 2010, the average annual premium for homeowners insurance in Arkansas was just $984. Arkansas law requires insurance companies to provide a comparison survey of home insurance premiums charged for sample coverage situations by geographic areas. Current Arkansas insurance cost comparisons are available on the Arkansas Insurance Department website.
Most companies consider a number of factors when setting rates for home insurance, including the cost to rebuild your home, how your home is constructed, how close your home is to fire hydrants and fire protection services, the age and condition of your home, and the claims history of your home and nearby homes. Other factors that affect your premium include the level of coverage you choose and any added endorsements, the deductible you select, your credit history, and your personal claims history.
Arkansas homeowners can generally reduce their average monthly cost by selecting a higher deductible, bundling two or more policies with the same insurance company, or installing safety features like sprinklers, storm shutters, and home security systems. To make sure you are getting the best deal, it’s a good idea to compare rate quotes from different reputable companies to get the lowest cost for the same level of coverage.
What Does It Cover?
Home insurance in Arkansas protects you from financial loss in the event your home and/or its contents are damaged or lost due to unforeseen circumstances named in the policy, such as a fire, theft, and windstorms. Consumers should also be aware of liability coverage, which protects you from lawsuits in the event that you, a family member, or your pet causes injury to another person. Finally, additional living expenses coverage reimburses you for costs you incur while your home is being repaired or replaced that are higher than your normal living expenses.
Do I Have to Get Home Insurance in Arkansas?
Home insurance is not required by law in Arkansas. But buying insurance can help protect your house and property against damage from unforeseen circumstances, and liability for accidents that injure other people or damage their property.
Optional Coverage to Consider
- Flood. Flood insurance is not typically included in standard homeowner’s insurance policies, and your lender will not usually require you to purchase it unless you live in an area that is at high risk of flooding. Homes in participating Arkansas communities can purchase flood insurance through the Flood Insurance Program (NFIP). For more information on NFIP or for a list of Arkansas agents who sell flood insurance, consumers can click www.FloodSmart.gov.
- Fire and Lightning. Most Arkansas homeowner’s insurance policies provide coverage for fire and lightning, but it’s important to verify that you have purchased this coverage, since fires in particular have the potential to consume your home and all of your belongings. Make sure that the damage that results from fire-related perils, such as smoke damage and damage from fire extinguishing agents, are covered as well.
- Hazard. Hazard insurance and home insurance are terms that are often used interchangeably. Hazard insurance is not required by law in Arkansas, but is often required by lenders to protect their investment. The hazard component of your homeowner’s insurance will cover your home, your belongings, and outlying structures such as detached garages and tool sheds. To be adequately insured for all of your property, you may need to purchase a greater amount of hazard insurance than what is required by your lender.
- Windstorm. Windstorm and hail coverage is included in most homeowner’s insurance policies, but may be excluded from some. In Arkansas, a state that is particularly at risk for tornadoes and severe thunderstorms, some insurers require that damage caused by windstorm or hail be subject to a separate deductible. According to Farm Bureau Insurance, Arkansas averages 19 tornadoes and more than $11 million in property damage a year.
- Earthquake. Earthquake coverage is not included in most Arkansas homeowner’s insurance policies. If you are having trouble finding earthquake coverage through traditional sources, you may want to seek coverage through Arkansas’ Market Assistance Program (MAP), which came about from the Arkansas Earthquake Authority Act of 1999. While Arkansas is not known for having particularly strong earthquakes, some past quakes have caused significant property damage.
- Replacement Cost Coverage. When you purchase home insurance coverage, you have the option to insure your home at its replacement cost or actual cash value. Replacement cost coverage is generally more expensive but will cover the entire cost necessary to repair or replace your home, up to the policy limit or up to a stated percentage above the market value of the property. If you only insure your home at market value, you risk having incomplete coverage if you home is a complete loss and must be rebuilt, forcing you to either pay the difference or settle for a smaller home.
- Scheduled Personal Property Endorsement. Some homeowners have valuables that need a higher level of coverage than the rest of their property. If you have high-end property such as jewelry, rare coins and stamps, antiques, and fine artwork, you may want to consider a scheduled personal property endorsement or personal article floater. This endorsement lists your valuable possessions and covers them beyond what would have been covered in a standard homeowner’s policy. Each article is itemized and described in detail in the event that the item is stolen, damaged, or lost to various perils.
Mobile Home Insurance in Arkansas
Mobile home policies offer protection specifically for owners of mobile homes, also known as manufactured homes. Some policies offer coverage only for damage or loss of your mobile home and its contents due to fire, theft, and other perils, while other policies may include liability coverage in case you, a family member, or your pet causes injury to a person who does not live in your home or damage to their property.