Montana Property Study Guide

Several answers a national course drills — a standard fire policy, a mandated appraisal clause, a nonpayment-versus-other-cause notice split, a FAIR plan — are simply not Montana’s. Two ideas carry most of the marks here: the valued policy law, and the word domicile.

The valued policy law reverses an instinct

A property course teaches the limit as a ceiling: recovery is the lesser of actual cash value, replacement cost or the policy limit. MCA 33-24-102 turns that around. On a total loss of insured improvements to real property, without criminal fault by the insured, the amount of insurance written in the policy “must be taken conclusively to be the true value … and the true amount of loss and measure of damages.” The insurer cannot argue after the fire that the building was worth less than the figure it agreed to insure. Payment of the premium is prima facie evidence of ownership; fraud in procurement remains a defence.

MCA 33-24-103 does the same for scheduled personal property: where the insurer sets specific valuations on listed items and prices the premium on them, a total loss pays at the stated valuation, with no deductions except the selected deductible. The testable carve-out: motor vehicle policies are excluded.

Cancellation, where the deciding word is “domicile”

Two overlapping regimes, and the narrow one wins for the home someone actually lives in. MCA 33-23-401 forbids cancelling or refusing to renew a policy insuring private residences “on any home occupied by the insured as a domicile” without 45 days’ written notice including a statement of the specific reason or reasons — except nonpayment, which requires not less than 20 days. Everything else falls to MCA 33-15-1103(2): cancellation “is not effective until 10 days after a notice of cancellation is either delivered or mailed.” That subsection opens “Except as provided in 33-23-401” — the hinge between the two.

So the seasonal cabin, the rental house and the unoccupied dwelling all get 10 days, for every ground, nonpayment included; Montana runs no 10-day/30-day split. The occupied home gets 45, or 20 for nonpayment. The sorting is by what the building is to the insured, not by the reason for cancelling.

What Montana does not prescribe

Montana prescribes no standard fire policy form and mandates no appraisal clause — neither Chapter 24 Part 1 nor the policy-provisions and claims parts of Chapter 15 contains one. It regulates the measure of recovery rather than the form of the contract, which is what the valued policy law does. An answer choice describing Montana’s “standard fire policy” describes another state.

Nonrenewal, renewal premium, inquiries and old losses

Nonrenewal of general property and casualty business needs 45 days’ notice before expiration, to the insured and the producer (MCA 33-15-1105(1)(a)). The renewal premium notice runs on its own clock: not more than 60 days and not less than 30 days before the due date, explaining what happens on nonpayment (MCA 33-15-1105(2)).

An inquiry is not a claim, and MCA 33-15-1105(5) says so three ways: an inquiry may not ground a nonrenewal, may not raise the premium, and may not be reported to third parties.

Loss experience ages out. Under MCA 33-18-210(11)(c), an insurer may not refuse, refuse to continue, charge higher rates or limit coverage on a personal homeowners policy based solely on adverse loss experience 7 years old or older. Read the operator: seven years or older, so a loss that has just turned seven is already out.

No FAIR plan — and the surplus lines valve

Montana has no residual property market: Title 33, chapter 8 is captioned “Insurance Assistance Plans (Terminated),” both parts included. Hard-to-place property goes to surplus lines, which gives the diligent-effort rule real weight here.

Under MCA 33-2-302(2)(a), coverage may go to an unauthorized insurer only where it cannot be obtained from authorized insurers, shown by a diligent effort with a minimum of three authorized insurers — or fewer, if fewer write that line. Two escapes: (2)(b) excuses the search where an authorized insurer’s rate is at least 10% higher than the unauthorized quote, on disclosure; (2)(c) excuses an exempt commercial purchaser who asks in writing after being told authorized coverage may afford greater protection with more regulatory oversight. Writing it needs its own credential, the surplus lines producer license (MCA 33-2-305).