The 2009 headline read "Arkansas At Risk For Major Earthquake?" Hyperbole or high probability? According to the expert cited in the CBS.com article, the new fault found in eastern Arkansas is a 'very, very dangerous (area) at risk of earthquake.' Should you be worried? Well, how about just being prepared. You're obviously shopping for homeowner's insurance so we'll help you prepare all we can. First, we'll tell you some things you must know when shopping for Arkansas house insurance rates. Then we will give you some idea of what it will cost. And finally we'll show you how to find the best rates out there. Let's get started.

Arkansas House Insurance: The Basics
Aside from earthquakes, your basic homeowner's policy covers a range of different risks, perils and liabilities. An HO-3 policy, the most popular in Arkansas, will look something like this:

  • Coverage A- Dwelling
    This will pay to rebuild/repair your home in the event of a peril such as fire, tornado, etc. If you have a mortgage, you will probably have to cover at least 80% of the home's value.
  • Coverage B- Other Structures
    This covers unattached property like sheds and garages and is typically 10% of your home's coverage amount.
  • Coverage C- Personal Property (PP)
    This repairs or replaces your personal belongings and coverage is usually 50% of your home's amount of coverage.
  • Coverage D- Additional Living Expenses
    This pays for alternate living arrangements should your home become unlivable because of a peril covered in Coverage A. It's usually about 20% of the home's coverage amount.
  • Coverage E- Comprehensive Personal Liability
    This protects you in the event someone is injured on your property. It typically covers law suits and damages and usually starts at $100,000 per accident.
  • Coverage F- Medical Expense
    Pays for medical expenses per person, per accident when someone is injured on your premises.

Little Things to Know About Arkansas House Insurance
Know the difference between "actual cash value" (ACV) and "replacement cost": ACV takes depreciation (age, wear, and tear) into consideration when calculating for a loss. For example, a tornado tears your 15-year-old roof off. If the life of a roof is 20 years, ACV coverage will probably give you 25% of the cost of a new roof. Not very comforting. On the other hand, replacement cost—usually purchased at a slightly higher premium of 2% to 15% of base premium—replaces, repairs, or rebuilds (in the case of houses) using the same or similar materials without considering depreciation.

Know that Arkansas has a program called E.A.G.L.E. ("ending arguments gently, legally and economically") which provides mediation for consumers and insurers when conflicts arise.

Know that policies usually don't cover floods, sewer and water back up, and earthquakes. These policies can be purchased separately or added (sewer/water back up) on to a standard policy. There are currently over 50 insurance companies that issue earthquake policies. If you're unable to find earthquake coverage, the Market Assistance Program (MAP)—set up as a result of the Arkansas Earthquake Authority Act of 1999—can help you.

Sample Arkansas House Insurance Rates
Let's look at a few rate scenarios—effective 2010—compiled by an Arkansas Department of Insurance company survey.

Scenario A- HO-3 policy for a brick home with $80,000 in Dwelling coverage.

Pulaski rates ranged from $437 to $1,360.
St. Francis rates ranged from $411 to $1,322.
Union rates ranged from $398 to $1,251.

Scenario B- HO-# policy for a frame home with $120,000 in Dwelling coverage.

Baxter rates ranged from $447 to $1,430.
Craighead rates ranged from $606 to $2,271.
Sebastian rates ranged from $527 to $1,516.

Finding the Best Arkansas House Insurance Rates
In 2010, over 30 Arkansas insurance companies had rate increases ranging from 3% to 20%. With the unpredictability of natural disasters and the resulting claims that fuel these increases, it's no wonder Arkansas house insurance rates rise. And you can see from the above examples just how much rates can vary from one company to the next. There are two primary ways to save big on rates. The first is to ask an agent about all available discounts offered—discounts that can save you as much as 50%. Here's a sampling to get you thinking:

  • Protective devices like dead-bolt locks, smoke detectors, fire extinguishers, automatic sprinklers, burglar/fire alarms, and new plumbing/wiring.
  • Multi-line (house, auto, life)
  • Senior (55+)
  • Non-smoker
  • Paying in advance vs. making monthly or bi-monthly payments.
  • Payroll deducted payments.
  • Military
  • New house discounts; the newer the house the lower the risk.
  • Claims free discount
  • Home retrofitting and other earthquake mitigation actions.
  • Credit Score

The second is to comparison shop with LocalInsurance. LocalInsurance will scour the web to find the best rates from agents in your area. It's free and takes less than 30 minutes. So why not find the absolute lowest rates. It's your money, isn't it?

If you are interested in learning more about Arkansas home insurance, there are a number of resources that are offered by the state. Arkansas has a Department of Insurance which can help ensure that you have the appropriate coverage for your home and provide you with useful information when selecting a homeowners insurance policy.