Montana Homeowners Insurance

Montana's homeowners insurance market addresses unique challenges including wildfire risk, severe winter weather, and rural property characteristics. Understanding policy forms, coverages, and Montana-specific requirements is essential for licensed producers.

Standard Homeowners Policy Forms

Montana uses Insurance Services Office (ISO) standard forms with state-specific modifications:

HO Policy Forms

Exam Tip: The HO-3 Special Form is the most common homeowners policy in Montana. Know the difference between open perils (all risks except excluded) and named perils (only listed perils covered).

Coverage Sections

Standard HO-3 Coverages

Open Perils vs. Named Perils

Open Perils (Coverage A - Dwelling)

• Covers all risks of direct physical loss
• Except those specifically excluded
• Burden on insurer to prove exclusion applies

Named Perils (Coverage C - Personal Property)

• Only covers perils listed in policy
• Common named perils include fire, lightning, windstorm, hail, explosion, theft
• Burden on insured to prove peril applies

Montana-Specific Considerations

Wildfire Coverage

Wildfire is a significant risk throughout Montana. Key considerations:

Wildfire Risk Mitigation

Montana encourages property owners to reduce wildfire risk:

Exam Tip: Montana producers should understand defensible space requirements. Properties with fire mitigation may qualify for premium discounts.

Severe Winter Weather Coverage

Montana's harsh winters create specific coverage needs:

Dwelling Vacancy

Montana follows standard vacancy provisions:

• Coverage reduced after 60 consecutive days of vacancy
• Vandalism and malicious mischief excluded
• Glass breakage excluded
• Insured should notify insurer of extended absence

Flood Insurance

NFIP in Montana

Flood damage is NOT covered by standard homeowners policies. Montana residents in flood-prone areas must purchase separate flood insurance:

Montana Flood Zones

Replacement Cost vs. Actual Cash Value

Valuation Methods

Montana Requirements

Montana law requires insurers to:

• Offer replacement cost coverage for dwellings
• Clearly explain ACV vs. RC in writing
• Provide coverage limits adequate for replacement
• Disclose coinsurance requirements

Policy Conditions

Duties After Loss

Montana policyholders must:

1. Protect property from further damage
2. Notify insurer promptly
3. Prepare inventory of damaged/stolen items
4. Provide documentation (receipts, photos, records)
5. Cooperate with investigation
6. Submit proof of loss (sworn statement if required)

Insurer Duties

Montana insurers must:

• Acknowledge claims within 10 working days
• Begin investigation promptly
• Communicate claim status regularly
• Pay undisputed amounts within 30 days of agreement
• Explain any denials in writing with reasons

Common Exclusions

Standard HO Exclusions

Montana-Specific Exclusions

• Mine Subsidence: Damage from mine collapse (special coverage available)
• Volcanic Eruption: Limited coverage may be available

Endorsements and Additional Coverages

Common Montana Endorsements

Farm and Ranch Endorsements

Many Montana homeowners have agricultural operations:

Exam Tip: Montana has significant agricultural activity. Know that standard homeowners policies generally exclude farm operations, which require separate coverage.