Negligence, the elements of a liability claim, types of damages and the basic structure of liability policies are covered in the national Casualty Insurance Basics guide. This guide covers the Montana law on those topics that the Montana portion of the Casualty exam tests: how the code classifies casualty insurance, Montana's comparative negligence rule, and the policy rules that apply to casualty contracts.

What Montana classifies as casualty insurance (33-1-206)

Montana lists these kinds of insurance as casualty insurance:

• vehicle insurance, covering loss of or damage to any land vehicle or aircraft
• liability insurance
• workers' compensation and employers liability
• burglary and theft
• glass
• boiler and machinery (equipment breakdown)
• credit insurance, covering loss when debtors don't pay the insured
• malpractice, covering liability for negligence in rendering expert, fiduciary or professional service
• other listed kinds

Selling auto liability requires the casualty line. Selling homeowners requires the property line (33-1-206, 33-1-210).

Comparative negligence: the 51% bar (27-1-702)

• An injured person whose own negligence contributed to the harm may still recover if that negligence was not greater than the negligence of the person or persons sued.
• Damages are reduced by the injured person's own percentage of fault.

Montana is an at-fault state for auto claims, with no no-fault/PIP system. See the Montana Personal Auto guide.

Rules for casualty policies

• Conformity provision. A casualty policy covering a Montana risk must state that it conforms to the minimum requirements of Montana law (33-23-103).
• Defense costs. The commissioner may disapprove a casualty form that puts defense costs inside the limits unless the commissioner allows it (33-1-502(2)).
• Form filing. Forms are filed at least 60 days before use, and are deemed approved if not acted on in 60 days (33-1-501).
• Cancellation and nonrenewal (33-15-1102 to 33-15-1106):
  • After 60 days, midterm cancellation is allowed only for listed reasons, with 10 days' notice.
  • Nonrenewal needs 45 days' notice.
  • "Renewal" means extending a policy for 90 days or more.
  • A policy with an indefinite term may let the insurer cancel on an anniversary date with 45 days' notice.
• Professional liability has its own 60-day notice rule, covered in the Montana Other Casualty guide.
• Guaranty protection. The Montana Insurance Guaranty Association pays covered claims of an insolvent P&C insurer up to $300,000 per claim. It pays workers' compensation claims in full and never pays punitive damages (33-10-105, 33-10-102).

Common exam traps

• Vehicle insurance in Montana covers aircraft as well as land vehicles.
• Glass, boiler and machinery, and credit insurance are all casualty lines under Montana's definitions.
• Under Montana's bar, a plaintiff at 50% still recovers half. At 51%, the plaintiff recovers nothing.
• A casualty policy must carry a Conformity with Montana statutes provision.