Auto Insurance Requirements in Montana

According to the Montana Motor Vehicle Responsibility Code, any vehicle used on public roads must be insured by a liability policy. This law is meant to ensure motorists in Montana will be responsible for any damage they cause behind the wheel. The minimum coverage requirements are 25/50/10. It must include two types of liability coverage: bodily injury and property damage. In Montana, an insurer must offer you uninsured/underinsured motorist coverage, but it is not required to drive. You can reject it in writing.

In Big Sky Country, motorists stopped for a traffic violation or involvement in a motor vehicle collision must show proof of insurance – such as your insurance ID card – to law enforcement. A motorist also needs to display their driver license and vehicle registration.

Montana Required Car Insurance CoverageMT Required Min. Limits

Bodily Injury (BI)

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

Property Damage (PD)

$10,000 per accident

Montana Car Insurance Minimum Requirements

With auto insurance, the old maxim “the devil is in the details” applies. Here are the details of the two coverages you’ll need before you can legally drive in Montana:

Bodily Injury (BI): In Montana, BI is activated when you cause an accident, covering your liability when you accidentally hurt someone outside your car. If you’re liable, it helps pay for another person’s physical injuries and medical expenses, and even lost wages when the injured party is unable to work. If a family member (who lives in the same household as you) uses your vehicle and causes the accident, their liability is also covered by your BI. With a minimum policy in Montana, your insurer pays up to $25,000 to each person not in the car with you, to a maximum of $50,000 per accident. These are the lowest limits you can buy to fulfill Montana's laws.

Property Damage (PD): PD also kicks in when you cause an accident. In Montana, you as a driver are required to carry a minimum of $10,000 in property damage coverage. It covers your liability and responsibility in reimbursing a third party for their property loss that you're at fault for. A damaged fence, a crushed fender and broken glass are a few examples of what this covers.

Optional Car Insurance Coverages in Montana

The following coverages are not mandatory, but you can choose to include them at an extra cost to your Montana insurance premiums. They are recommended by many consumer advocates, government bodies and insurance companies because they provide you with better protection. For example, if you only buy the minimum insurance as required by Montana law and later cause an accident, neither your injuries nor your car’s damage will be covered. The same goes when your vehicle is damaged by a windstorm, flood or a deer - you’ll have to pay out of pocket. Here are a few optional coverages that motorists may consider adding to their policy:

Uninsured Motorist Bodily Injury (UMBI): Montana has the 15th highest rate of uninsured motorists, with 14.1% of claims involving uninsured drivers (2012). What happens if you’re in an accident, you sustain an injury, but the other driver has no insurance? This coverage is activated, and your insurer steps in to reimburse you. Typical coverage might include expenses related to your own bodily injuries, a disease, sickness or even death – if they occur as a result of the accident. All are reasons to elect this coverage. The lowest limits you can purchase for UMBI in Montana are 25/50. Note that while higher coverage is available, you cannot buy UMBI for higher limits than your BI in the same policy.

Collision coverage: is one of the two physical damage coverages. It provides compensation for physical damage to your vehicle. Usually it includes a deductible – the amount of the loss you pay out of pocket. Generally speaking, the higher the deductible, the less you will pay for your monthly insurance premium.

Comprehensive coverage: the other one of the physical damage coverages. It will reimburse you for loss from theft or damage other than a collision with another car or object. Some examples are a fire, hail, flood, cracked windshield or contact with deer or birds – whatever is spelled out in the insurance contract. Comprehensive is typically sold with a deductible of $100-$300. If you choose a higher deductible you can usually lower your monthly premium.

Medical Payments: This coverage pays medical and funeral costs for you or others injured or killed in an accident when a rider or driver in your insured car. Depending on your insurer's policy, included are reasonable dental, hospital, surgical and nursing expenses.

Alternative Proof of Financial Responsibility

Whenever you renew your driver’s license in Montana, you must provide proof of insurance. According to the Montana Motor Vehicle Responsibility Code, there are several acceptable alternative proofs of financial responsibility:

Certificate of Deposit: A deposit of $55,000 in cash, or securities from a trust fund of equal market value can be registered with the State Treasurer. The State Treasurer will give you the certificate to be your proof when you also present him or her with evidence that you have no unsatisfied judgments again you from past accidents.

Surety Bond: This requires the bond of a surety company licensed in the Big Sky Country. It essentially functions like a minimum liability policy that will pay for the bodily injuries and property damage you are responsible for. However, the surety company will ask you for the money it has paid out for you. The bond itself, or a copy of it, can function as your proof.

Real Estate Bond: a bond made valid by two individuals who vouch to pay on your behalf in case you fail to satisfy judgments against you for damages you cause in an accident. The bond has to be backed with real estate they own in Montana as collateral. It has to provide at least the coverage or payout that a minimum insurance policy otherwise would. Have the bond be approved by the county’s court judge (where the listed real estate is located), and the court clerk will file it to the DMV for you, or at least furnish proof of bond approval for you to file on your own.

Comments and Questions