General property and casualty concepts are covered in the national Property and Casualty Insurance Basics guide: insurable interest, perils and hazards, negligence and damages, and policy structure. This guide collects the Montana law behind those concepts. It covers the property side first (definitions, the valued policy law and loss measurement), then the casualty side (the kinds of casualty insurance, comparative negligence and casualty policy rules).

What Montana calls property insurance

• Property insurance covers real or personal property, on land, on water or in the air, against loss or damage from any hazard. It includes consequential loss, such as lost income after a fire closes a business. It doesn't include noncontractual legal liability, which is casualty insurance (Mont. Code Ann. 33-1-210).
• Wet marine and transportation insurance covers vessels and hulls, marine builder's risks, freight, and goods in import or export (33-1-209(3)).
• Marine protection and indemnity insurance covers liability from owning or operating a vessel on ocean or inland waters (33-1-209(2)).
• Montana's Nationwide Inland Marine Definition Act (33-1-221 to 33-1-229) lists what an inland marine policy may cover.
  • Instrumentalities of transportation and communication include:
    • bridges, piers and pipelines
    • power and telephone lines
    • radio and TV towers and antennas
    • outdoor cranes
  • Personal property floaters include:
    • personal effects, furs and jewelry
    • fine arts
    • stamp and coin collections
    • musical instruments, but not radios or televisions
    • wedding presents for up to 90 days after the wedding
  • An inland marine policy may not cover:
    • furniture, fixtures and building improvements
    • merchandise being manufactured on the manufacturer's premises
    • money or securities in a safe or on premises, except in transit
• Ocean marine and foreign trade policies are exempt from Montana's form filing requirement (33-1-501(9)).

How Montana measures a property loss

• General measure (33-24-101). Unless the policy states a value or a more favorable basis, fire insurance pays the cost, when the loss is payable, to replace the property in its condition at the time of the loss. A valuation the insured gave that is fraudulent in fact lets the insurer rescind the contract.
• Valued policy law (33-24-102):
  • For a total loss of insured buildings and improvements not caused by the insured's criminal act, the amount of insurance in the policy is conclusively the property's value and the measure of damages.
  • The insurer may still raise fraud in obtaining the policy.
  • Paying the premium is prima facie evidence of ownership.
• Scheduled personal property (33-24-103). A specifically listed item at a stated value that's totally lost is paid at that stated value, minus only the deductible. Motor vehicle policies are excluded from this rule.
• Unpaid property taxes (33-24-104). The taxing entity has a lien on fire insurance proceeds for the amount owed.

Policy-level rules that apply to property policies

• Cancellation and nonrenewal (33-15-1103 to 33-15-1107):

  • Midterm cancellation only for listed reasons (after the first 60 days), with 10 days' notice.
  • Nonrenewal needs 45 days' notice, with a copy to the producer.
  • Owner-occupied homes need 45 days with specific reasons, or 20 days for nonpayment (33-23-401).

  See the Montana Homeowners guide for details.

• Rates may not be excessive, inadequate or unfairly discriminatory (33-16-201):

  • A rate is excessive only if it's unreasonably high and the area lacks reasonable competition.
  • A rate is inadequate only if it's unreasonably low and endangers solvency or tends to destroy competition.

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).
• 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

• Montana's valued policy law makes the policy amount the measure of a total loss of a building. That's not ACV or replacement cost.
• A total loss of scheduled personal property pays the stated value. The rule doesn't apply to autos.
• Inland marine can't cover furniture and fixtures, or money on premises outside of transit.
• Property insurance includes consequential loss but not liability.
• 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.