Who Is an Insured Under Montana Auto Insurance?

Ask two different insured-status questions

Automobile policies can protect different people for different coverages. Do not assume that a person who qualifies as an insured for liability also qualifies as an insured for UM, UIM, MedPay or another first-party benefit.

Montana's liability starting point

MCA § 61-6-103 requires a qualifying motor-vehicle liability policy to insure the person named in the policy and other persons using a covered motor vehicle with the named insured's express or implied permission.

Permission can be express or implied

Farmers Insurance Exchange v. Janzer

In Farmers Insurance Exchange v. Janzer, 215 Mont. 262, 697 P.2d 692 (1985), the insureds' minor son did not have express permission for the particular trip. The Montana Supreme Court nevertheless concluded that the evidence created a factual question concerning implied permission and vacated summary judgment.

Relevant evidence included prior driving history, family practices, access to the vehicle and keys, and restrictions imposed by the parents.

What if the driver exceeded the permission?

Montana cases distinguish between taking or using a vehicle without permission and exceeding the contemplated scope after possession or use was initially authorized.

In Horace Mann Insurance Co. v. Hampton, 235 Mont. 354, 767 P.2d 343 (1989), the driver initially obtained permission but later used the vehicle outside the owner's contemplated purpose. The Montana Supreme Court held that the statutory minimum liability protection remained applicable under the circumstances.

Borrowed vehicles require a two-direction insurance search

When a person drives someone else's vehicle, investigate both the insurance attached to the vehicle and insurance issued to the driver.

Another driver's insurance does not automatically eliminate the owner's policy

Bill Atkin Volkswagen, Inc. v. McClafferty and Swank v. Chrysler Insurance Corp. demonstrate why the existence of separate insurance carried by a permissive driver does not, by itself, eliminate the vehicle owner's statutory insurance obligation.

Montana recognizes operator policies

MCA § 61-6-103 separately recognizes an operator's motor-vehicle liability policy. Depending on its terms, an operator policy can insure the named individual against liability arising from the use of vehicles the person does not own.

Non-owned-auto coverage can contain additional conditions

A personal automobile policy may extend protection to use of a vehicle the insured does not own. The contractual analysis can turn on whether the vehicle was:

• used with the owner's permission;
• furnished or available for regular use;
• a temporary substitute automobile;
• owned by another household member;
• commercially owned or rented; or
• otherwise addressed by an exclusion or endorsement.

Cascade illustrates primary and excess layers

In Cascade Insurance Co. v. Glacier General Insurance Co., 156 Mont. 236, 479 P.2d 259 (1971), a borrowed automobile was covered under the vehicle owner's policy and separate insurance available to the driver operated as excess under the policies before the Court.

Current statutory exception: a named family member may be excluded

Current MCA § 61-6-301 expressly provides that Montana's mandatory motor-vehicle liability statute does not prohibit exclusion of a named family member from a motor-vehicle liability policy.

Older named-driver authority must be read historically

Iowa Mutual Insurance Co. v. Davis, 231 Mont. 166, 752 P.2d 166 (1988), invalidated a named-driver exclusion under the mandatory-insurance statute then in force.

Montana's Legislature later amended the statutory framework to expressly permit exclusion of a named family member. Iowa Mutual therefore remains useful as historical public-policy authority, but it should not be cited today for a categorical proposition that every named-family-member exclusion is invalid.

Insurance coverage does not automatically create personal tort liability

Montana's mandatory insurance law can require insurance protection for a permissive driver without making the vehicle owner personally responsible for every negligent act committed by that driver.

Ulrigg v. Jones, 274 Mont. 215, 907 P.2d 937 (1995), expressly rejected the theory that mandatory automobile insurance itself creates owner vicarious liability.

Separate owner liability may instead depend on an independent basis, depending on the facts and applicable law, such as:

• the owner's own negligence;
• negligent entrustment;
• agency;
• employment or respondeat superior;
• a specific statutory rule; or
• another recognized tort basis.

First-party coverage uses a different insured analysis

UM, UIM, MedPay and other first-party coverages often define insured persons differently from Montana's mandatory liability rule.

Lee: ownership does not automatically create named-insured status

In Lee v. USAA Casualty Insurance Co., 2001 MT 59, 304 Mont. 356, 22 P.3d 631, the claimant co-owned vehicles listed on the declarations but was not expressly identified as the named insured and did not satisfy the ordinary contractual family-member definition.

The case illustrates why ownership of a covered vehicle and contractual insured status must be analyzed separately when first-party benefits such as UIM are claimed.

Who-is-an-insured workflow

Separate the factual investigation from the legal conclusion. Build the insured-status record first, then apply the statute and policy definitions.

Evidence to gather

• complete insurance policy
• declarations page
• all endorsements
• vehicle registration
• vehicle title
• VIN
• named insureds
• driver identity
• household relationships
• residence information
• permission to use the vehicle
• prior vehicle use
• location and access to keys
• driving restrictions
• communications granting or restricting permission
• named-family-member exclusion
• other driver-specific exclusion language
• driver's separate policy
• non-owned-auto coverage
• operator policy
• UM insured definition
• UIM insured definition
• MedPay insured definition
• covered-auto definitions
• other-insurance clauses

Common insured-status mistakes

• Assuming only people shown on the insurance card can be insured.
• Treating “not listed” as the same thing as “not insured.”
• Failing to investigate implied permission.
• Assuming a deviation in use automatically destroys liability coverage.
• Looking only at the driver's policy and ignoring the vehicle owner's policy.
• Looking only at the owner's policy and ignoring non-owned-auto coverage.
• Assuming another applicable policy eliminates the owner's statutory obligation.
• Ignoring the current named-family-member statutory exception.
• Using Iowa Mutual as though current § 61-6-301 had never been amended.
• Confusing owner insurance obligations with personal owner tort liability.
• Assuming vehicle ownership automatically creates named-insured status.
• Assuming a liability insured is automatically a UIM insured.
• Assuming household status without investigating actual residency facts.
• Deciding policy priority before determining which policies actually apply.

Montana authority map