State guide · Southeast
Arkansas subrogation law guide
The insured recovers only if its fault is of a lesser degree than the fault of the parties it sues, so an even 50/50 split bars recovery. Below that line, damages are reduced by the insured's percentage of fault.
Arkansas at a glanceAR
- Property damage
- 3 years
- Bodily injury
- 3 years
- Fault rule
- Modified, 50% bar
- Gov. notice
- None
Overview
Arkansas gives a subrogating carrier generous time and a demanding set of equitable rules. Property damage, bodily injury and product liability claims all run three years, and written contract claims run five, longer than most neighboring states. The comparative fault rule in Ark. Code 16-64-122 bars recovery when the insured's fault equals or exceeds the defendants' fault, so a 50/50 liability split recovers nothing. The defining feature is the made-whole doctrine: Franklin and Riley hold that a carrier has no subrogation right until the insured is fully compensated, that policy language cannot change this, and that the carrier needs an agreement with the insured or a court ruling before its rights attach. Arkansas has not adopted the economic loss doctrine for products, which helps when a defective machine destroys only itself. Joint and several liability is largely gone, but the Arkansas Supreme Court struck down nonparty fault allocation, so defendants cannot point to an empty chair. Local governments are immune beyond their liability insurance, which makes the entity's coverage the practical recovery source. Arkansas courts also disfavor splitting a single cause of action between insured and carrier.
Quick reference with citations
- Property damage SOL
- 3 years
- Ark. Code 16-56-105
- Bodily injury SOL
- 3 years
- Ark. Code 16-56-105
- Product liability
- 3 years from the date of the death, injury or damage (Ark. Code 16-116-103); no product statute of repose; 4 years for UCC warranty claims (Ark. Code 4-2-725); construction claims are subject to repose of 5 years for property damage and 4 years for personal injury after substantial completion (Ark. Code 16-56-112)
- Written contract
- 5 years
- Contract and indemnity recoveries
- Comparative fault rule
- Modified, 50% bar
- Ark. Code 16-64-122
- Government notice of claim
- No general statutory pre-suit notice
- Arkansas has no general pre-suit notice-of-claim statute for local governments. Counties, cities, school districts and other political subdivisions are immune from tort liability except to the extent of their liability insurance (Ark. Code 21-9-301), and political subdivisions must insure their motor vehicles (Ark. Code 21-9-303), so a recovery usually runs against that coverage. Claims against the State go to the Arkansas State Claims Commission (Ark. Code 19-10-201 et seq.) because the State cannot be made a defendant in its own courts (Ark. Const. art. 5, sec. 20).
Fault rule in practice
How Arkansas's rule changes a $50,000 recovery.
The insured recovers only if its fault is of a lesser degree than the fault of the parties it sues, so an even 50/50 split bars recovery. Below that line, damages are reduced by the insured's percentage of fault.
Authority: Ark. Code 16-64-122
| Insured's share of fault | Recoverable in AR | Under pure comparative |
|---|---|---|
| 0% | $50,000 | $50,000 |
| 20% | $40,000 | $40,000 |
| 50% | Barred | $25,000 |
| 60% | Barred | $20,000 |
Doctrines that move the number
Arkansas doctrine checklist.
Made-whole doctrine
Arkansas applies the made-whole doctrine as strictly as any state. Franklin v. Healthsource of Arkansas, 328 Ark. 163 (1997) held that an insurer has no subrogation right until the insured is fully compensated, regardless of policy language. Riley v. State Farm Mutual Automobile Insurance Co., 2011 Ark. 256 added that subrogation rights do not attach until there is an agreement with the insured or a judicial determination that the insured was made whole, and the rule reaches statutory PIP reimbursement under Ark. Code 23-89-207.
Economic loss doctrine
Arkansas has not adopted the economic loss doctrine for products. Farm Bureau Insurance Co. v. Case Corp., 317 Ark. 467 (1994) allowed a strict liability claim where the defective product damaged only itself, and Bayer CropScience LP v. Schafer, 2011 Ark. 518 noted again that the court has never adopted the doctrine.
Joint and several liability
Under the Civil Justice Reform Act of 2003, defendants are generally liable only for their own percentage of fault (Ark. Code 16-55-201), with limited reallocation of an uncollectible share (Ark. Code 16-55-203) and joint liability for parties acting in concert or as agents. Johnson v. Rockwell Automation, Inc., 2009 Ark. 241 struck down the provision allowing fault to be allocated to nonparties, so fault is compared among the parties to the case.
Anti-subrogation and waiver
A carrier cannot subrogate against its own insured or a co-insured, but a loss payee with no liability coverage under the policy can be pursued (Dalrymple v. Royal-Globe Insurance Co., 659 S.W.2d 938 (Ark. 1983)). A party that a lease or contract required the insured to cover may be treated as a co-insured and shielded from subrogation.
Practice notes
Working Arkansas subrogation files.
- 1
Resolve the made-whole question before filing. When the insured's only uninsured loss is the deductible, include the deductible in the demand and get a signed acknowledgment that payment of the claim plus deductible makes the insured whole. When the insured has larger uninsured losses, such as contents above limits or business income, coordinate a joint recovery and document the allocation, because Riley treats an unresolved made-whole issue as a bar to the carrier's claim.
- 2
The 50% bar is unforgiving at the margin. If a carrier pays $46,000 on a parking lot collision and the insured is 40% at fault, the carrier recovers $27,600. At 49% it recovers $23,460. At an even 50% split it recovers nothing, unlike Texas and Oklahoma, which allow recovery at 50%. Score evenly divided liability files as high risk and push for liability evidence before demand.
- 3
Arkansas disfavors splitting a single cause of action, so when the insured files an injury suit against the same tortfeasor, the property damage subrogation claim should be joined or the carrier should intervene. Watch for settlements that release all claims arising from the accident; the carrier's recourse may then shift to the settlement proceeds, where the made-whole test applies first. Track the insured's attorney and the liability carrier's settlement correspondence closely.
- 4
For a damaged building or vehicle involving a city truck, county road crew or school bus, there is no notice deadline, but the political subdivision is immune beyond its liability insurance. Identify the entity's carrier and limits early, present the claim to that carrier directly, and confirm coverage before investing in experts. Claims against State agencies follow a separate Claims Commission process with its own filing rules.
- 5
Ishqkala flags Arkansas files where the claim notes show uninsured losses (high deductibles, underinsured contents, lost rents) and holds the automatic demand until a made-whole agreement or allocation is logged. The SOL Tracking Engine uses the three-year tort period, adds the five-year written contract clock for lease and service agreement claims, and applies the construction repose dates in Ark. Code 16-56-112 when a contractor is the target.
Key cases
Franklin v. Healthsource of Arkansas, Inc.
328 Ark. 163, 942 S.W.2d 837 (1997)
An insurer is not entitled to subrogation unless the insured has been made whole, even when the policy expressly grants a subrogation right. Policy drafting cannot contract around the doctrine in Arkansas.
Riley v. State Farm Mutual Automobile Insurance Co.
2011 Ark. 256, 381 S.W.3d 840
Subrogation rights do not arise until the insured and insurer agree, or a court determines, that the insured has been made whole. Sending a lien notice does not protect the carrier's interest.
Johnson v. Rockwell Automation, Inc.
2009 Ark. 241, 308 S.W.3d 135
Struck down the Civil Justice Reform Act's nonparty fault allocation provision. Defendants cannot reduce their share by blaming an absent party, which helps a carrier that sues the right defendants.
Inter-company arbitration
Arbitration Forums panels apply Arkansas substantive law, including the 50% bar, and signatory carriers must arbitrate company-paid damages up to $100,000 in the Automobile and Property forums. Because the made-whole defense belongs to the insured, include the insured's deductible in the filing and document that the insured has no other uninsured loss, so the award does not set up a later dispute with the policyholder. Product defect claims are not compulsory in the Property program.
How Ishqkala applies this guide
AR rules, built into every score.
- Opportunities with a Arkansas loss state are calendared against the 3 years property damage period or the 3 years bodily injury period, whichever controls the claim type.
- The insured's estimated fault share is applied under modified, 50% bar before recoverable dollars are scored.
- Public-entity claims are flagged for counsel review because notice and immunity rules vary by entity.
- Alerts fire at 180, 90, 45 and 15 days before the controlling deadline.
Other modified, 50% bar jurisdictions
FAQ
Arkansas subrogation FAQ
3 years (Ark. Code 16-56-105). A subrogating carrier generally takes the insured's claim subject to the same limitation period, usually measured from the date of loss.
Modified, 50% bar (Ark. Code 16-64-122). The insured recovers only if its fault is of a lesser degree than the fault of the parties it sues, so an even 50/50 split bars recovery. Below that line, damages are reduced by the insured's percentage of fault.
Arkansas has no general pre-suit notice-of-claim statute for local governments. Counties, cities, school districts and other political subdivisions are immune from tort liability except to the extent of their liability insurance (Ark. Code 21-9-301), and political subdivisions must insure their motor vehicles (Ark. Code 21-9-303), so a recovery usually runs against that coverage. Claims against the State go to the Arkansas State Claims Commission (Ark. Code 19-10-201 et seq.) because the State cannot be made a defendant in its own courts (Ark. Const. art. 5, sec. 20).
Arkansas applies the made-whole doctrine as strictly as any state. Franklin v. Healthsource of Arkansas, 328 Ark. 163 (1997) held that an insurer has no subrogation right until the insured is fully compensated, regardless of policy language. Riley v. State Farm Mutual Automobile Insurance Co., 2011 Ark. 256 added that subrogation rights do not attach until there is an agreement with the insured or a judicial determination that the insured was made whole, and the rule reaches statutory PIP reimbursement under Ark. Code 23-89-207.
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