For the Montana Personal Lines exam, the Personal Auto Policy (PAP) is tested two ways: the national policy structure and the Montana auto rules layered on top of it. This standalone guide walks through the lettered parts every PAP uses, then focuses on the Montana rules an agent applies every day—financial-responsibility minimums, the at-fault legal system with modified comparative negligence, the requirement to offer uninsured- and underinsured-motorist coverage, and how policies can be cancelled or nonrenewed. Spend your study time on the Montana overlay; that is where the state questions live.

The national fundamentals (quick version)

The Personal Auto Policy insures individuals and families for the vehicles they own and drive. It is divided into clearly labeled parts:

• Part A — Liability Coverage: pays for bodily injury (BI) and property damage (PD) the insured is legally responsible for, with a duty to defend and defense costs paid on top of the limit.
• Part B — Medical Payments: pays reasonable medical and funeral expenses for the insured and passengers regardless of fault.
• Part C — Uninsured/Underinsured Motorists (UM/UIM): pays your injuries when the at-fault driver has no insurance or too little.
• Part D — Coverage for Damage to Your Auto: Collision (impact or upset) and Other Than Collision (Comprehensive) (theft, fire, hail, hitting an animal), each with a deductible, paid at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions set the rules.

An insured generally includes the named insured, the resident spouse, resident family members, and anyone using the covered auto with permission. The policy also extends the named insured's liability coverage to a non-owned auto the insured borrows with permission. Eligible vehicles are private passenger autos owned by individuals and households, not commercial trucks or buses. That skeleton is the same nationwide; Montana changes the dollar limits and the legal environment around it.

Montana is an at-fault (tort) state

Montana follows a tort (at-fault) system rather than a no-fault system. Whoever causes the crash is financially responsible, and the injured person recovers from that driver's liability insurance—or sues. Because of this, liability coverage and proof of financial responsibility are the backbone of Montana auto regulation.

When both drivers share blame, Montana uses modified comparative negligence with a 51% bar. Each party's recovery is reduced by that party's own percentage of fault, but a claimant who is 51% or more at fault recovers nothing. A claimant found 50% at fault still recovers half of their damages; a claimant found 51% at fault is barred entirely. This differs from a pure comparative system (where even a mostly-at-fault claimant recovers something) and from a no-fault system (where each driver turns first to their own coverage). Remember: Montana is modified comparative with a 51% bar.

Financial responsibility: the 25/50/20 minimums

Montana drivers must demonstrate financial responsibility, almost always by buying liability insurance meeting the state's minimum split limits, commonly cited as 25/50/20:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $20,000 property damage per accident

Agents say this aloud as "25/50/20" (verify the current statutory figures). These are bare-minimum floors—most clients should buy more to protect their assets. A bond or deposit can technically satisfy the law, but auto liability insurance is the everyday method. After certain serious violations a high-risk driver may be required to file an SR-22 certifying that the required coverage is in place. A driver who cannot find coverage in the voluntary market may obtain it through the state's automobile insurance plan / assigned-risk mechanism (verify the current program).

Uninsured and underinsured motorist coverage

Here is a point Montana agents must apply: insurers writing auto liability must make UM and UIM coverage available to the insured.

• Uninsured Motorist (UM) bodily injury coverage responds when the insured is injured by an at-fault driver who carries no liability insurance, including a hit-and-run driver.
• Underinsured Motorist (UIM) applies when the at-fault driver has insurance but at limits too low to cover the insured's damages.
• UIM pays the difference between the other driver's lower BI limit and your UIM limit, so a client with strong UIM is protected even against a bare-minimum at-fault driver.

The recurring theme: Montana requires the insurer to offer UM/UIM, and these coverages respond only when the other driver is legally at fault.

Coverages, limits, and loss settlement

• In a 25/50/20 limit, the third number (20) is the property-damage liability limit per accident; the first two are BI per person and per accident.
• Medical payments pays reasonable medical expenses for the insured and passengers regardless of fault; collision pays impact/upset damage; comprehensive pays theft, fire, hail, vandalism, and animal strikes.
• The deductible is the amount the insured pays before the insurer covers the rest of a covered physical-damage loss.
• Transportation expenses / rental reimbursement helps pay for a rental while the covered auto is repaired after a covered loss, and towing and labor coverage pays roadside costs up to a stated limit.
• Exclusions to remember: organized racing for prize money is excluded, as is intentional or business use beyond the policy's scope.
• After a loss the insured's duties include promptly notifying the insurer and cooperating in the investigation. The named insured may cancel the policy at any time by notifying the insurer.

Cancellation and nonrenewal notice

Montana limits how and when an insurer can end a personal auto policy:

• Mid-term cancellation generally requires the insurer to provide the policyholder the advance written notice the law requires.
• Nonrenewal (declining to continue at the end of the term) likewise requires advance notice within the required time, so the insured can shop for replacement coverage.
• On cancellation the insurer retains only the earned premium and refunds the unearned portion; an insurer-initiated cancellation refunds pro rata without penalty.

Required vs. optional coverages in Montana

Key Montana numbers to memorize

Common exam traps

• Montana is at-fault, not no-fault—there is no mandatory PIP here.
• Montana uses modified comparative negligence with a 51% bar—recovery is reduced by the claimant's own fault, and a claimant 51% or more at fault is barred entirely.
• 25/50/20—don't transpose the $20k property-damage figure into a bodily-injury slot.
• UM/UIM must be offered/made available; treat it as a required offer, not an optional afterthought.
• Hitting an animal is Comprehensive, not Collision.
• Collision/Comprehensive pay ACV on a total loss; the deductible is the insured's share first.
• Liability defense costs are paid in addition to the limit (national rule that still applies in Montana).

Quick recap

• The PAP keeps its national Parts A–F structure; Montana changes the limits and legal context.
• Montana is a tort/at-fault state using modified comparative negligence with a 51% bar—reducing recovery by the claimant's own fault, but barring a claimant who is 51% or more at fault.
• Financial-responsibility minimums are commonly cited as 25/50/20 (verify).
• Uninsured and underinsured motorist coverage must be made available to the insured.
• Montana has no mandatory no-fault/PIP; Med Pay, Collision, and Comprehensive are optional.
• Mid-term cancellation and nonrenewal require the advance written notice the law specifies, with unearned premium refunded.