Over the last several decades, the 50 states have adopted statutes regarding insurance that has created two classes of states: “no-fault” states and “fault” or “tort” states. Montana is a “fault” or “tort” state.
This means that liability for personal injuries and property damage sustained in a motor vehicle accident are wholly the responsibility of the driver who caused the accident – or was “at fault.”
In a “no-fault” state, the situation is a bit more complicated.
Who is liable for damages in a “no-fault state?”
Twelve states are currently classified as “no-fault” states. In these states, fault is theoretically irrelevant. Every driver in those states must carry a minimum amount of property and medical liability insurance.
The current minimum limits for coverage in Montana are $25,000 per person and $50,000 for all claims arising from the same accident.
When an accident occurs, the parties involved must provide notice to their own insurers, who are required to pay the claim up to the limits imposed by the state’s no-fault laws or the insurance policies that are involved.
If the damages exceed the limits of insurance stated in the policy, the policy holder is responsible for paying the balance of the claim.
Even in no-fault states, the driver who caused the accident must pay for the property damage suffered by the other drivers.
Complications of allocating coverage in a no-fault state
Another factor affecting the question of “who pays” is the state’s comparative fault law.
In Montana, a driver (or the driver’s insurer) may claim damages from another driver only if the driver seeking recover is determined to have been less than percentage of fault attributable to the other driver.
The insurance companies will negotiate between themselves to determine the share of damages that must be paid by each company. If the companies cannot agree on their respective shares of liability, the case will most likely result in a courtroom trial.
The insurance companies will have access to any police reports on the accident and to studies of why the accident occurred. The companies will also take statements from all drivers involved in the accident.