The Personal Auto Policy itself (Parts A through F, who is an insured, covered autos, exclusions and conditions) is covered in the national Personal Auto Policy guide. This guide covers the Montana law that sits on top of the policy: the compulsory insurance and financial responsibility rules in Title 61, chapter 6, the auto provisions of the Insurance Code in Title 33, chapter 23, and Montana's fault rules. Montana has no Personal Lines exam, so these rules are tested on the Casualty exam (and on Property where physical damage is involved).

Compulsory insurance and minimum limits

• Every owner of a vehicle registered and operated in Montana must continuously carry liability insurance at the state minimums, or hold a certificate of self-insurance (Mont. Code Ann. 61-6-301).
• Minimum limits are 25/50/20 (61-6-103):
  • $25,000 bodily injury per person
  • $50,000 bodily injury per accident
  • $20,000 property damage per accident
• The driver must carry an insurance card from the insurer, or show electronic proof on a device, and produce it on demand (61-6-302).
• Penalties for driving uninsured (61-6-304):
  • First conviction: a fine of $250 to $500.
  • Second or later conviction: the court orders surrender of the vehicle's registration receipt and license plates. A fourth offense adds surrender of the driver's license.
  • A prior conviction counts if it was less than 5 years earlier.
• A driver required to prove future financial responsibility may do it by having the insurer file a written certificate that a liability policy is in effect (61-6-133).

Required features of a Montana liability policy (61-6-103)

• An owner's policy must cover the named insured and anyone using the vehicle with express or implied permission.
• The insurer's liability becomes absolute when covered injury or damage occurs. The policy can't be canceled afterward as to that loss.
• The premium can't be raised midterm unless there is a change in exposure.
• A policy written to meet the minimums can't carry a reduced-limits endorsement.
• A binder issued while the policy is pending satisfies the requirement.
• The law expressly allows a policy to exclude a named family member (61-6-301(1)(b)).
• An insurer may cancel, nonrenew or surcharge because of an accident only if the insured or operator:
  • violated a traffic law,
  • was found negligent or contributorily negligent, or
  • paid damages to another party.

Fault: an at-fault state with a 51% bar

Montana is a tort (at-fault) state with no PIP or no-fault system. The injured party recovers from the at-fault driver's liability coverage. Under modified comparative negligence (27-1-702):

• An injured person may recover only if their negligence was not greater than that of the person sued.
• Their damages are reduced by their own percentage of fault.
• At 51% fault, recovery is barred.

Example: damages of $100,000 with the plaintiff 20% at fault means the plaintiff recovers $80,000.

Uninsured motorist coverage (33-23-201, 33-23-203)

• UM coverage must be included in every auto liability policy unless the named insured rejects it.
• Limits must be at least the bodily injury minimums of 61-6-103.
• After a rejection, the same insurer need not add UM on renewal unless the named insured asks in writing.
• An uninsured motor vehicle is one with no bodily injury liability insurance or bond at the time of the accident.
• Stacking: an insurer may stop insureds from adding limits together across vehicles only if its premiums actuarially reflect that limit and the rates are filed.

Physical damage and claims

• A total-loss settlement based on "book" value is void. Montana requires payment of actual replacement value (33-23-202).
• The insurer can't require a claimant to use a particular body shop (33-18-224).
• Approved property-damage-only claims of $2,500 or less must be paid or offered within 30 working days after a correct proof of loss (33-18-245).
• The general rule still applies: pay or deny within 30 days of proof of loss, or 60 days if more information was reasonably requested, with 10% interest on late payments (33-18-232).

Cancellation and nonrenewal (33-23-211 to 33-23-217)

• Adding a physical damage deductible of $100 or less isn't a cancellation.
• No nonrenewal notice is needed if the producer placed other acceptable coverage at least 20 days before the anniversary date.
• Statements in a cancellation or nonrenewal notice can't be the basis of a lawsuit against the insurer.
• Notices are kept 3 years. Proof of mailing to the last-known address is sufficient proof of notice.

Rating and underwriting limits

• Adverse driving record information 3 years old or older can't be the sole reason to refuse, surcharge or limit a private passenger policy. For commercial auto the look-back is 5 years (33-18-210(11)).
• No points or surcharge for a claim where the insured was not at fault (33-18-210(12)).
• Mature driver discount (33-16-222, 33-16-223):
  • Drivers 55 or older who complete an approved defensive driving course get a rate reduction on liability, bodily injury and collision coverages.
  • The discount lasts 3 years, and the course must be retaken to keep it.
  • The insurer may require no at-fault accidents or moving violations.
• Filed rates must also give a reduction to qualified Montana National Guard members (33-16-203).
• Benefits under an authorized telematics agreement aren't illegal rebates (33-18-210(3)).
• Credit information (33-18-605):
  • An insurance score can't use income, zip code, gender, marital status or similar factors.
  • Credit can't be the sole factor to deny, cancel or nonrenew.
  • Medical collection accounts can't count against the applicant.
  • Scores must be updated at least every 36 months.

Assigned risk plan (61-6-144)

Drivers who are entitled to coverage in good faith but can't get it through normal channels are placed through Montana's assigned risk plan. Every auto liability insurer must participate. A person aggrieved by the plan manager's ruling appeals first to the commissioner. A further petition goes to the district court of Lewis and Clark County within 10 days.

Common exam traps

• Montana's minimums are 25/50/20. The property damage figure is $20,000, not $25,000.
• Montana is at fault with a "not greater than" comparative negligence bar, so a plaintiff at 51% recovers nothing.
• UM is included unless rejected. Rejection carries over to renewals with the same insurer.
• Auto cancellation and nonrenewal notice is 45 days, or 10 days for nonpayment.
• Total losses are paid at actual replacement value, not book value.
• A named family member exclusion is allowed.