Montana Automobile Insurance Plan – MT AIP

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Drivers in Montana – the Big Sky Country state – must purchase auto insurance in order to be on the road legally. However, if you have a history of traffic tickets or accidents on your driving record, then you may have difficulty finding coverage because insurance companies would consider you a high risk to insure. Montana drivers can apply to the Montana Automobile Insurance Plan (MT AIP) if they are turned down for auto insurance due to a less-than-perfect driving record. As long as you meet the eligibility criteria listed below, you will receive coverage for at least the Montana's minimum amounts of 25/50/25.

What is the Montana Automobile Insurance Plan (MT AIP)?

The Montana AIP became effective in 1951. It is part of the collective operation of the Western Association of Automobile Insurance Plans, serving to cover as many Montana drivers as possible, even those considered “high risk” in the eyes of some insurers. All auto insurers in the state must participate in the Plan in order to do ANY auto insurance business in Montana. Ahigh-risk driver is one who auto insurers determined to have a higher than average chance to file for claims; in order to prevent loss, they usually either give these drivers more expensive auto insurance quotes, or refuse to insure them voluntarily. Because insurers must accept all risks - preferred or high-risk - assigned through the MT AIP, the AIP is a mechanism by which the auto insurers share the losses generated by high risk drivers, so no one insurer bears the brunt of losses.

Most drivers who are licensed in Montana are eligible to seek residual coverage through the Montana AIP, given that they have been turned down by an auto insurance company when they applied on their own. These higher risk drivers are assigned to Montana auto insurers based on these insurers' market share in the state. So, for example, if Farmers Union has 10% of the total auto insurance market in Montana, then Farmers Union will be assigned to cover 10% of the high risk drivers in Montana. You will receive auto insurance coverage, but you will not be able to pick your insurer.

In Montana, every licensed auto insurance agent and broker can tell you about the Plan if the MT AIP is where you land, and help you apply.

Montana AIP Eligibility

In order to apply for coverage through the Montana AIP, you must certify on your application that you’ve been turned down for auto insurance coverage within the last 60 days. If that’s the case, then you also need to have a vehicle registered in Montana and a valid driver’s license. Be sure to fill out the insurance application completely and accurately.

Drivers may be turned away – even from the Montana AIP – if you owe money to a previous auto insurer or if you choose Physical Damage coverage without bringing your car in for inspection by an authorized insurance representative. If you rectify these situations by paying the bill or bringing your car around, your application will go ahead immediately. However if your application is deemed to be misleading around important information – like your driving record – then your assigned insurer can cancel your policy and the Montana AIP can bar you from reapplying for 12 months.

Montana AIP Coverage

The coverages available to drivers applying through the Montana AIP are the same as those offered to safer drivers. But you may pay more for them. Once you are assigned an insurer through the MT AIP, you will be covered for 3 years. This is a great time to build a better driving record, and become eligible for lower insurance rates in Montana. If at the end of 3 years you still have trouble finding coverage on your own, then you may re-apply to the Montana AIP. Assuming that you still meet their other eligibility criteria, you will likely find coverage again. However it may be with a different assigned auto insurer this time.

The table below shows the auto insurance coverages that are mandatory in Montana. Note that you can buy a higher level of coverage for a higher premium. When you consider how much both medical costs and the costs to repair vehicles can run, you may be best served by choosing more than the minimum coverage levels.

Mandatory Coverage

Montana Required Min. LimitsMontana AIP Maximum Limits

Bodily Injury (BI)

$25,000 per person / $50,000 per accident$100,000 per person / $300,000 per accident

Property Damage (PD)

$25,000 per accident$50,000 per accident

Your assigned insurer may also offer you the optional coverages shown below. In Montana these include Medical Payments coverage that pays your medical bills, should you have an accident resulting in these. There is also Uninsured Motorist Bodily Injury coverage at the limits of $25,000 per person/$50,000 per accident. This is the only level of coverage offered, and you can either accept it or reject it on your application. Again this pays for YOUR bodily injuries should you be hit by a driver who doesn’t have auto insurance.

Optional Coverage

Montana AIP Min. LimitsMontana AIP Maximum Limits

Medical Payments (MedPay)

$2,000 per person / accident$5,000 per person / accident

Uninsured/Underinsured Motorist BI (UMBI)

$25,000 per person / $50,000 per accident$25,000 per person / $50,000 per accident

Comprehensive

Actual cash value of your car, up to $25,000No higher limit

Collision

Actual cash value of your car, up to $25,000No higher limit

If you choose Comprehensive or Collision coverage, you will be offered a choice of deductibles that includes: $100, $200, $250, $500, or $1,000 per accident. Usually, the higher a deductible you choose, the more you will need to pay out-of-pocket for repairs, but the lower your premiums will be. Note that if your car is an antique (older than 25 years) then your assigned insurer may legally refuse to provide Comprehensive and Collision insurance to you.

Montana AIP Premiums and Payments

According to Montana’s Commissioner of Securities and Insurance, auto insurance quotes for drivers placed through the AIP are usually higher than average. But there is no simple formula for determining how much higher. Different insurers use different sets of criteria in assessing you as a risk. But it pays to understand the factors that most Montana auto insurers are likely to use when they consider your application.

When paying your insurance premium in Montana, you have 3 basic options. The first is to pay the entire annual premium up front with your application. The second is to pay a deposit of 40% of the annual premium with the application, and the remaining 60% within 30 days. The third is to pay in installments. This still requires paying 40% of the annual premium up front, and the remainder in 5 equal monthly installments. Note that a $4 charge is added each month to the installment payments.

In the happy event that you do find auto insurance coverage at lower rates, you may cancel the policy with the assigned insurer, and receive a prorated refund of the premium you have not used.

How to Apply for the Montana Automobile Insurance Plan

Any licensed auto insurance agent or broker should be able to explain the Montana AIP, and help you apply if that’s appropriate.

For more information about the Montana AIP, you can call the Office of the Montana State Auditor, Commissioner of Securities and Insurance Consumer Hotline at 1-800-332-6148. Or visit the Montana Auto Insurance Plan website.

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Last Updated: January 2016

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