The question presented by this appeal is whether an Arkansas court has authority under the Arkansas long-arm statute, Ark. Code Ann. § 16-4-101 (1987), and the due process clause, U.S. Const, amend. 14, to exercise jurisdiction over a foreign insurance company in a suit by the insured to recover under the insurance policy’s uninsured motorist clause for damages arising out of an accident in Arkansas with an uninsured Arkansas motorist.
On May 9,1989, appellant George Szalay, then a resident of New Jersey, renewed his automobile insurance policy with appellee, Keystone Insurance Company (Keystone), a Pennsylvania corporation doing business in New Jersey. The policy contained an uninsured motorist clause which provided in relevant part:
PART C — UNINSURED MOTORIST COVERAGE — Insuring Agreement
We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury:
1. Sustained by a covered person; and
2. Caused by an accident.
PART F — GENERAL PROVISIONS — Policy Period and Territory
This policy applies only to accidents and losses which occur:
1. During the policy period as shown in the Declarations; and
2. Within the policy territory.
The policy territory is:
1. The United States of America, its territories or possessions[.] [Emphasis supplied.]
Appellant moved to Fort Smith, Arkansas, in May of 1989 to pursue an employment opportunity in Shady Point, Oklahoma. He signed a six month lease to rent an unfurnished apartment in Fort Smith. Appellant’s wife stayed in the New Jersey apartment, and appellant rented furniture to use while in Arkansas. On June 16, 1989, defendant Oscar L. Handcock, struck appellant while appellant was riding his bicycle in Fort Smith. Appellant sued defendant Handcock in a Fort Smith Circuit Court to recover for his alleged injuries. Appellant subsequently amended his complaint to allege that defendant Handcock was an uninsured motorist and to join Keystone Insurance Company as a party defendant. Appellee Keystone filed an answer asserting that Arkansas lacked personal jurisdiction over Keystone. Keystone is not authorized to do business in our state, and the company has no office, employee, or agent in Arkansas. The company also does not advertise or otherwise solicit business in Arkansas.
The trial court granted Keystone’s motion to dismiss for lack of jurisdiction, and entered a final judgment as to appellee Keystone pursuant to Rule 54 of the Ark. R. Civ. P. We take jurisdiction under Rule 29(1 )(c) of the Rules of the Supreme Court which provides that this court has jurisdiction in cases implicating the interpretation or constitutionality of our state statutes. In this case, we are concerned with whether the trial court was correct in interpreting the Arkansas long-arm statute to forbid the exercise of jurisdiction over appellee Keystone. We reverse and remand.
To determine whether a court has in personam jurisdiction over a non-resident defendant, we must undertake a two-part analysis. First, we must determine whether the non-resident defendant’s actions satisfy the requirements of section 16-4-101 (C) of the long-arm statute. Second, we consider whether the exercise of in personam jurisdiction is consistent with due process. Capps v. Roll Serv. Inc., 31 Ark. App. 48, 787 S.W.2d 694 (1990).
Ark. Code Ann. § 16-4-101 (C)(1) (1987) provides in part:
1. A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a (cause of action) (claim for relief) arising from the person’s:
(a) Transacting any business in this state;
(b) Contracting to supply services or things in this state;
2. When jurisdiction over a person is based solely upon this section, only a (cause of action) (claim for relief) arising from acts enumerated in this section may be asserted against him.
Ark. Code Ann. § 23-60-102(13) (1987) provides, “ ‘Transact’ with respect to insurance includes any of the following: (D) Transaction of matters subsequent to effectuation of a contract of insurance and arising out of it[.]” In the instant case, appellant Szalay is suing Keystone to enforce his contractual right to uninsured motorist coverage. Appellant’s enforcement action arises out of Keystone’s explicit contractual promise to provide uninsured motorist coverage. While the parties entered this contract in New Jersey, the accident implicating Keystone’s contractual obligation occurred in Arkansas. Given the insurance code’s broad definition of “transact,” we believe the legislature intended the “transacting business” provision of the long-arm statute to encompass an insured’s attempts to enforce contractual rights.
We have stated that the purpose of the “transacting business” provision is to permit Arkansas courts to exercise the maximum in personam jurisdiction allowable by due process. CDI Contractors, Inc. v. Goff Steel Erectors, Inc., 301 Ark. 311, 783 S.W.2d 846 (1990). We therefore consider whether the exercise of jurisdiction over appellee Keystone is consistent with due process.
The United States Supreme Court has held that due process prohibits a state’s court from exercising personal jurisdiction over a non-resident defendant unless the defendant has sufficient “minimum contacts” with the forum state. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). This rule does not afford us the luxury of applying a mechanical test. Leflar, American Conflicts of Law § 21. However, several settled principles guide us in answering our “minimum contacts” inquiry. ¡
First, the defendant must “purposefully avail itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253 (1958). The Supreme Court has held that the “minimum contacts” standard is not met when a defendant’s product merely winds up in a forum state solely as the result of the unilateral activity of one seeking to claim some relationship with the defendant. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985); Hanson, supra. While a defendant might have foreseen that his product would end up in the forum state, foreseeability alone will not satisfy the “minimum contacts” test:
[T]he foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
Appellee Keystone relies on World-Wide Volkswagen in arguing that Keystone did not purposefully avail itself of the privilege of doing business in Arkansas. Keystone contends that because it neither solicited business nor maintained an agent in Arkansas, it could hot reasonably anticipate being haled into court here. We disagree.
Appellant’s insurance policy contained a provision stating that the policy applied only to accidents and losses occurring within the policy territory. The policy explicitly defined the policy territory as “the United States of America, its territories or possessions.” Both the Fourth and Ninth Circuits have upheld jurisdiction over insurance companies in analagous situations. See Farmers Ins. Ex. v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911 (9th Cir. 1990); Rossman v. State Farm Mut. Auto Ins. Co., 832 F.2d 282 (4th Cir. 1987); August v. HBA Life Ins. Co., 734 F.2d 168 (4th Cir. 1984). We find the reasoning in these cases to be persuasive. The defendant insurance companies in the aforementioned cases also relied on World-Wide Volkswagen in arguing that they could not reasonably anticipate being haled into court in the forum state. However, the courts distinguished the business of manufacturing products to be placed in the stream of commerce from the business of selling insurance policies with nationwide territorial clauses. “Insurance by its nature involves the assertion of claims, and resort to litigation is often necessary.” August, supra, at 172. Furthermore, an automobile liability policy is typically sued on where the accident takes place. Rossman, supra. The courts concluded that insurance companies that contract to provide nationwide automobile liability coverage should reasonably anticipate being haled into the courts of a state where an accident occurs.
The Fourth Circuit reasoned that the insurance companies purposefully availed themselves of the privilege of doing business in the forum states by contracting to provide coverage for claims arising within policy territories that encompassed the entire United States:
In World-Wide Volkswagen, nothing about the defendant’s conduct indicated its willingness to be called into court in the foreign forum. Its only connection with Oklahoma was the result of the plaintiffs’ unilateral act of driving the car there. By contrast, [the insurance company’s] expectation of being haled into court in a foreign state is an express feature of its policy.
Rossman, supra, at 286.
In the instant case, Keystone’s territorial policy limit included Arkansas within its scope. Unlike automobile sellers and product manufacturers, insurance companies such as Keystone can control their amenability to suit by excluding certain states from the “policy territory” defined in the policy. See Rossman, supra. By not excluding any states in its definition of “policy territory,” Keystone purposefully contracted to fulfill its obligation of providing uninsured motorist coverage in foreign states such as Arkansas. Accordingly, we find that the contractual definition of the policy territory satisfies the purposeful availment prong of the “minimum contacts” inquiry.1
Due process also requires that a defendant’s “minimum contacts” with the forum state be such that “maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe, 326 U.S. at 316, (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). This inquiry examines the reasonableness of suit in the forum state. Asahi Metal Indus. Co., Ltd. v. Superior Court, 480 U.S. 102 (1987).
The Supreme Court has held that in cases where a defendant has purposefully availed himself of conducting business in the forum state “it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well.” Burger King, 471 U.S. at 476. In this case, we find that appellee Keystone purposefully availed itself of the privilege of conducting business in Arkansas by contracting to extend appellant’s coverage throughout the United States. Given this finding, Arkansas’ exercise of jurisdiction over a suit arising out of this purposeful availment is presumptively reasonable.
We do not believe appellee Keystone can overcome this presumption of reasonableness. Arkansas has a manifest interest in providing its residents with a forum when insurers refuse to pay claims. “These residents would be at a severe disadvantage if they were forced to follow the insurance company to a distant State in order to hold it legally accountable.” McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957). In this case, appellant Szalay has moved back to New Jersey since instituting his Arkansas suit. However, only contacts occurring prior to the event causing the litigation may be considered. Steel v. United States, 813 F.2d 1545 (9th Cir. 1987).
In this case, appellant was residing in Arkansas when he asserted his contractual rights under the uninsured motorist clause of his policy. It is reasonable to require insurance companies such as appellee Keystone to submit to the burdens of litigating this claim in Arkansas since it expressly contracted to extend appellant’s policy coverage to a territory including Arkansas.
Accordingly, we reverse the trial court’s dismissal and remand based on our holding that sufficient “minimum contacts” exist under both the long-arm statute and the due process clause to assert personal jurisdiction over appellee Keystone.
Holt, C.J., Dudley and Newbern, JJ., dissent.Our reasoning today would also support in personam jurisdiction under the “contract” provision of the Arkansas long-arm statute. Ark. Code Ann. § 16-4-401(c)(1)(b) (1987) provides that an Arkansas court may exercise jurisdiction over a cause of action arising from the defendant’s contracting to supply services or things in this state. In the instant case, appellant challenges the trial court’s ruling under the “transacting business” provision of the long-arm statute. His challenge is proper since the Commentary to the long-arm statute recognizes that situations will arise where a jurisdictional basis may be found under more than one subdivision of the statute.