What Happens When a Car Accident Claim Exceeds Insurance Limits?
The liability limit is a ceiling on the policy, not a ceiling on the harm. What the statute says about the money above it, and where an insurance agency stops being the right person to ask.
Short Answer
The at-fault driver’s insurer pays up to the limit and no further. What answers above it is not that policy. In Arkansas it is most often your own underinsured motorist coverage — which Arkansas does not reduce by what the at-fault carrier already paid, and which exists on your policy only if uninsured motorist coverage was elected in the first place.
Arkansas requires liability limits of $25,000 for the bodily injury or death of one person, $50,000 where two or more people are hurt in the same accident, and $25,000 for damage to property, under Ark. Code § 27-22-104. Those figures are a licensing floor. They were not set against the cost of an injury, and nothing in the statute pretends otherwise.
So the question this page answers is narrow and practical: the other driver’s policy has paid its limit, the loss is larger than that, and the file is still open. What decides the rest?
What the Limit Actually Is
A limit is the most the insurer promises to pay under that coverage for that accident. Reaching it does not end the claim, close the loss, or extinguish what the at-fault driver owes. It ends that insurer’s obligation. Arkansas is an at-fault state, so responsibility for the harm sits with the driver who caused it, and their policy is only the first place that responsibility is funded from.
Two of the three numbers get misread often enough to be worth separating. The per-person figure caps what one injured person can collect for bodily injury. The per-accident figure caps the total across everyone injured in the same crash — so two seriously injured people share it, and the second one does not get a fresh limit. Property damage is a separate limit again, and exhausting it has no effect on the bodily injury limits.
Underinsured Motorist Coverage Is the Coverage Built for This
Underinsured motorist coverage is the specific answer to an at-fault driver whose limits are too small. It is governed by Ark. Code § 23-89-209, and Arkansas writes it more favourably than a number of states do.
Arkansas does not subtract the other driver’s payment from your underinsured limit
Under § 23-89-209, coverage under underinsured motorist protection shall not be reduced by the tortfeasor’s insurance coverage, except to the extent the injured party would end up compensated beyond their actual damages. Several states run the opposite rule, where the underinsured limit is treated as the outer figure and whatever the liability carrier paid comes off it first. Arkansas does not. That difference decides how much is actually available above the limit, and it is the single most useful thing on this page.
It is only on your policy if uninsured motorist coverage was elected
Section 23-89-209 provides that underinsured motorist coverage is not available, and insurers are not mandated to offer it, unless the insured has elected uninsured motorist coverage under § 23-89-403, and that it shall not be issued without uninsured coverage issued in coordination with it. A rejection signed years ago therefore removes both. That subject — how the rejection works, what it takes with it, and how to check whether one is sitting on your file — belongs to our guide to uninsured motorist coverage in Arkansas, which is where to go next if the answer here is that you are not sure.
The statute also sets out a written notice route to your own underinsured motorist insurer, by certified mail with documentation of the losses, where a tentative agreement has been reached to settle at the other driver’s liability limits. That is a condition attached to the coverage rather than a strategy, and if a file reaches that point the questions it raises are for an attorney.
Whether Limits Stack Depends on Your Policy Wording
Stacking — combining the underinsured limits carried on more than one vehicle — is widely described as something Arkansas simply allows. That is not what the law says, and the difference matters to anyone counting on it.
Arkansas courts enforce an effective anti-stacking clause
Arkansas permits insurers to write anti-stacking provisions into the policy, and where the wording is clear the courts have applied it to limit recovery to the coverage on the vehicle involved. Where stacking has been allowed, it has generally turned on the particular clause failing to do the job — barring the stacking of separate policies while saying nothing about stacking vehicles within one policy. So this is a question about the document you were issued, not a question about the state. The place to look is the limit-of-liability section of your own policy.
Comparative Fault Reduces What Can Be Recovered
Arkansas compares the fault charged to the person claiming with the fault charged to the party or parties from whom they seek to recover, under Ark. Code § 16-64-122. Where the claiming party’s fault is of a lesser degree, damages are diminished in proportion to their own share. Where it is equal to or greater, nothing is recoverable.
Two things follow. A claimant charged with a fifth of the fault recovers four fifths of the damages, so the reduction applies to the loss before any limit is reached — it can move a claim back below a limit it looked like exceeding. And because the comparison runs against each party recovery is sought from, the familiar shorthand about a half share is a two-party simplification. In a crash with more than one responsible party, which is exactly the situation where extra sources of recovery come up, the statute is not applying a single flat threshold.
What Else Can Answer
Above the liability limit, the realistic sources are these. Which of them exist in a given case is a question of fact, and identifying them early is part of why the claim gets reported thoroughly.
| Source | What it is |
|---|---|
| Your underinsured motorist coverage | Applies where the at-fault driver had coverage but not enough. Not reduced by what their carrier paid, subject to the no-windfall proviso in § 23-89-209. |
| Your uninsured motorist coverage | Applies where there was no liability coverage at all, and in many hit-and-run situations. A separate coverage from the one above, with its own limit. |
| The at-fault driver’s other policies | A personal umbrella sits above the auto limits and is a common second layer. Whether one exists is established during the claim. |
| Other responsible parties | Where an employer, another driver, or another party shares responsibility, each is compared separately under § 16-64-122. |
| Medical payments coverage and health insurance | Pay medical costs without waiting for fault to be settled. They do not enlarge anyone’s liability limit; they change who is out of pocket while the file is open. |
| The at-fault driver personally | Whatever is owed beyond all available coverage. What can be collected, and how, is a legal question rather than an insurance one. |
Where this page stops
Everything above concerns what coverage does and where it ends. What happens to an unpaid balance afterward — being sued personally, a judgment, what any of that reaches — is the practice of law, and an insurance agency is the wrong place to ask. If a claim is heading past the available limits, an Arkansas attorney should be involved early rather than after a settlement is signed.
What You Can Check Before Any of This Matters
- Find the underinsured motorist line on your declarations page. It may appear as UIM, or combined with uninsured motorist as UM/UIM. If it is absent, a written rejection is the usual reason, and that rejection removed the uninsured coverage alongside it.
- Read your limits against each other. Under § 23-89-403 the insurer must make uninsured motorist bodily injury available on written request in limits up to the liability limits you elected. High liability limits sitting above floor-level uninsured motorist limits is a gap you can close by asking.
- Find the limit-of-liability section and read what it says about more than one vehicle. That paragraph, not the state, decides whether limits stack.
- Check whether an umbrella sits above the auto policy. It is the layer that applies when the underlying limits are exhausted, on your side as well as the other driver’s.
Where this sits in what you already pay
Across our carrier market full coverage generally runs $79–$105 a month. Cribb cross-market averages for Northwest Arkansas. Planning ranges, not quotes and not any carrier’s filed rates. Underinsured motorist limits and an umbrella layer are priced separately from the coverage on your own vehicle, and how much either moves a particular premium varies enough between carriers to be worth asking about specifically.
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Frequently Asked Questions
What happens when a car accident claim exceeds the at-fault driver’s insurance limits in Arkansas?
Their insurer pays up to the limit and its obligation under that coverage ends. The remainder does not disappear: it can be answered by your own underinsured motorist coverage, by an umbrella or other policy the at-fault driver carries, or by another responsible party. Anything still unpaid after that remains owed by the at-fault driver personally, which is a legal question rather than an insurance one.
What are Arkansas’s minimum liability limits?
Under Ark. Code 27-22-104, $25,000 for bodily injury or death of one person in one accident, $50,000 for bodily injury or death of two or more people in one accident, and $25,000 for damage to or destruction of the property of others. The per-accident figure is shared across everyone injured in that crash rather than applying to each person separately.
Does Arkansas reduce underinsured motorist coverage by what the at-fault driver’s insurer paid?
No. Ark. Code 23-89-209 provides that coverage under underinsured motorist protection is not reduced by the tortfeasor’s insurance coverage, except to the extent the injured party would be compensated beyond their damages. A number of states apply the opposite rule, so this is a meaningful difference in how much is available above the liability limit.
Can underinsured motorist limits be combined across more than one of my vehicles?
It depends on your policy wording rather than on state law. Arkansas permits anti-stacking provisions, and courts have enforced clear ones to limit recovery to the coverage on the vehicle involved. Where stacking has been allowed it has generally been because the clause addressed stacking separate policies without addressing stacking vehicles within one policy. The limit-of-liability section of your own policy is what answers this.
Do I have underinsured motorist coverage automatically?
Only if uninsured motorist coverage was elected. Ark. Code 23-89-209 provides that underinsured motorist coverage is not available, and insurers are not mandated to offer it, unless the insured has elected uninsured motorist coverage under section 23-89-403, and that it shall not be issued without uninsured coverage issued in coordination with it. A written rejection therefore removes both at once.
Can I still recover if I was partly at fault?
Arkansas compares the fault charged to the claiming party with the fault charged to the party or parties they seek to recover from, under Ark. Code 16-64-122. Where the claiming party’s fault is of a lesser degree, damages are diminished in proportion to their own share; where it is equal to or greater, nothing is recoverable. Because the comparison runs against each party separately, a case with several responsible parties is not resolved by a single flat threshold.
Does an umbrella policy help when auto limits are exhausted?
It is the layer designed for it. A personal umbrella sits above the liability limits on the underlying auto and home policies and responds once those are exhausted. It works the same way on the other side: an at-fault driver’s umbrella is a source of recovery above their auto limits, and whether one exists is established during the claim.
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Disclaimer: This article is general information and is not insurance, legal, tax or financial advice, and it is not a substitute for the terms of your own agreements or policies. Statutory provisions and case law are summarized in substance rather than reproduced and may change; how they apply depends on the facts and on the policy actually issued to you, which controls in every case. Stacking, limits and the conditions attached to underinsured motorist coverage vary by carrier and by policy. Nothing here is legal advice. Questions about liability, a judgment, or anything owed beyond available coverage are for a licensed Arkansas attorney rather than for an insurance agency. Coverage is set by the insurance company and is subject to the terms, conditions and exclusions of the policy actually issued to you, which controls in every case. Cribb Insurance Group Inc is an independent insurance agency licensed in Arkansas, Oklahoma, Missouri and Texas. Cribb Insurance Group Inc is an independent insurance agency, not an insurance company. The insurance company carries the risk and files the rates, and any claim payment comes from the insurance company and not from the agency. Where Cribb binds coverage or issues a policy, it acts on a carrier’s behalf and within the authority that carrier grants, and the policy actually issued controls in every case. Reviewed 2026-08-10; insurance law and carrier filings change, and this article may not describe the current position after that date. Coverage cannot be bound, changed or cancelled through this website, by email, by social media or by voicemail. No coverage is in force until Cribb Insurance Group Inc or the insurance company confirms it in writing. Cribb Insurance Group Inc, 1601 SW Regional Airport Blvd, Bentonville, AR 72713 · (479) 286-1066 · service@cribbinsurance.com.