Financial responsibility laws are laws that ensure a driver has enough finances to pay for the damages caused in an accident. To ensure complicity with these laws, many states have made auto insurance mandatory. The state of Montana has also followed suit. The state of Montana also follows the tort system. According to this system, one of the drivers involved in an accident is held responsible for the accident and has to pay for all the damages caused. It also allows the not at fault driver to sue the at fault driver for damages.
Every state that makes auto insurance mandatory also fixes a minimum sum that every driver must be insured for. This is known as the minimum liability. The minimum liability in the case of the state of Montana is of the form 25/50/10. This stands for twenty five thousand dollars for bodily injury per person, fifty thousand dollars for bodily injury in total per accident and property damage coverage worth ten thousand dollars. Bodily injury is used to cover all the medical costs incurred by the other driver and property damage is used to cover the repair and replacement costs of his car. Property damage is also used to cover any damage caused to any buildings, fences, lamp posts and other properties.
These are the minimum sums that one has to be insured for. However, most of the accidents will cost a lot more and a person will have to be insured for a much larger sum. The insurance industry experts believe that most of the accidents can be covered with insurance cover of a hundred thousand per person and three hundred thousand dollars in total.
There are other forms of insurance coverage that are very popular too. None of these coverage policies have been made mandatory in the state of Montana. A very common insurance policy used by many drivers across the country is uninsured motorist’s coverage. Many times people are involved in accidents with uninsured motorists. The driver might not have any assets to sue as well. In such a scenario, this policy helps you out by paying for your damages.
A similar policy would be underinsured motorist’s coverage. Many people tend to buy insurance policy for only the minimum liability. However, the accident might cost a lot more and he might not be able to pay for your damages. In such a scenario, the underinsured motorist’s coverage will help pay for the damages.
Physical damage policies are always popular. Minimum liability will only pay for damages to the car of the victim. If you have caused the accident, you will need a separate policy to pay for your damages. Collision and comprehensive damage are the two kinds of physical damage. Collision damage pays for your damages in case your car is involved in an accident. It will cover repair and replacement as well. A few policies cover lost wages. Comprehensive damage covers all the damages caused by other agents such as hail, rain, snow. It will cover damages cause due to theft or vandalism. It will even pay for damages caused to your due to falling objects.