On the Montana Property & Casualty exam, the Personal Automobile Policy appears both as a standard ISO-style contract and as a set of Montana auto rules you must apply. This standalone guide reviews the policy's coverage parts, then drills into the Montana overlay: the commonly cited 25/50/20 financial-responsibility minimums, the at-fault (tort) system with modified comparative negligence (51% bar), the requirement that uninsured- and underinsured-motorist coverage be made available, and cancellation/nonrenewal notice. The Montana-specific material is where most state credit is earned.

Policy structure (the national base)

The Personal Auto Policy (PAP) is a packaged contract organized into lettered parts:

• Part A — Liability: pays bodily injury (BI) and property damage (PD) the insured is legally liable for; the insurer provides a defense, and supplementary payments such as defense costs are paid in addition to the limit.
• Part B — Medical Payments: pays reasonable medical and funeral costs for the insured and passengers regardless of fault.
• Part C — Uninsured/Underinsured Motorists: pays the insured's injuries when the at-fault party is uninsured or underinsured.
• Part D — Coverage for Damage to Your Auto: Collision and Other Than Collision (Comprehensive), each with a deductible, settled at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions.

Limits may be written as split limits (e.g., 25/50/20) or as a Combined Single Limit (CSL). Insureds include the named insured, resident spouse, resident relatives, and permissive users—a friend who borrows the car with permission is generally covered. Eligible vehicles are private passenger autos, pickups, and vans not used mainly for business, and an owned utility trailer generally falls within the covered-auto definition for liability. That framework is national; Montana governs the limits and the liability environment around it.

Montana uses a tort (at-fault) liability system

Montana is an at-fault / tort state, not a no-fault state. The driver who causes a crash is financially responsible, and the injured party collects from that driver's liability coverage or by filing suit. This is why liability coverage and financial responsibility dominate Montana auto law.

Montana applies modified comparative negligence with a 51% bar. The rule to remember: a claimant'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 driver found 50% at fault can still collect (reduced by half); cross the 51% line and recovery is barred entirely. Contrast this with pure comparative states (where even a 90%-at-fault claimant recovers the other 10%) and with old contributory-negligence states (where any fault bars recovery). Expect the exam to test that Montana is modified comparative, 51% bar.

Financial responsibility: 25/50/20

Every Montana driver generally must show financial responsibility, usually by carrying liability insurance at or above the minimum split limits, commonly cited as:

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

Shorthand: "25/50/20" (verify the current statutory figures). These are statutory floors; producers routinely recommend higher limits. A deposit or bond can satisfy financial responsibility, but liability insurance is the standard method. After certain serious violations a driver may be required to file an SR-22, a certificate proving the required coverage is in force.

In a 25/50/20 limit, remember the order: the first number is BI per person, the second is BI per accident, and the third (20) is property damage per accident—don't slide the property-damage figure into a BI slot.

Uninsured and underinsured motorist rules

This is a heavily tested Montana area:

• Insurers writing auto liability must generally make available (offer) uninsured motorist (UM) and underinsured motorist (UIM) coverage to the insured.
• UM responds when the insured is injured by an at-fault driver who has no liability insurance, and it also covers hit-and-run drivers.
• UIM applies when the at-fault driver has insurance but at limits too low to cover the insured's damages; it pays the gap up to the insured's UIM limit.
• The other driver must be legally at fault for UM/UIM to respond.
• Stacking—combining the UM limits of more than one owned vehicle—may increase the coverage available.

Optional and physical-damage coverages

• Medical Payments (Med Pay) is optional and pays medical/funeral costs regardless of fault. Montana does not mandate PIP/no-fault.
• Collision pays for impact with another vehicle or object or upset of the auto; Comprehensive (Other Than Collision) pays for losses such as theft, fire, hail, vandalism, or hitting an animal—a real concern on Montana's rural highways. Both are optional but typically required by a lender.
• On a total loss, physical-damage coverage pays the vehicle's actual cash value at the time of loss—gap coverage is what pays the difference between ACV and a larger loan balance. A betterment deduction may apply when new parts leave the vehicle better than before the loss.
• A newly acquired auto is generally covered for a limited time if reported within the required period, and a named driver exclusion removes coverage while a specifically named person is driving.

Cancellation and nonrenewal

Montana regulates how an insurer may end a personal auto policy:

• Mid-term cancellation generally requires the insurer to give the policyholder the advance written notice required by law.
• Nonrenewal at the end of the term likewise requires advance written notice within the required time so the insured can find replacement coverage.
• On cancellation, the insurer keeps only the earned premium and refunds the unearned portion; when the insurer cancels, the refund is generally pro rata without penalty.

Required vs. optional coverages

Key Montana numbers to memorize

Common exam traps

• Montana is at-fault (tort), not no-fault. There is no mandatory PIP.
• Montana uses modified comparative negligence with a 51% bar—a claimant 51% or more at fault recovers nothing; don't call it pure comparative.
• 25/50/20—the $20k is property damage; don't slide it into a BI slot.
• UM/UIM must be offered/made available in Montana; treat it as a required offer rather than something the agent can skip.
• Hitting an animal is Comprehensive, not Collision (and it happens often on Montana roads).
• Total loss pays ACV; gap coverage (not the PAP itself) covers a larger loan balance.
• Liability defense/supplementary payments are paid on top of the limit (national rule that still applies in Montana).

Quick recap

• The PAP's Parts A–F structure is national; Montana sets the limits and legal framework.
• Montana is a tort/at-fault state using modified comparative negligence with a 51% bar—recovery is reduced by the claimant's own fault, but a claimant 51% or more at fault is barred.
• Minimum liability is 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 and physical damage are optional, and total losses pay ACV.
• Mid-term cancellation and nonrenewal require the advance written notice the law specifies, with unearned premium refunded.