State guide · West
Montana subrogation law guide
The insured recovers if its negligence is not greater than the combined negligence of all parties it sues, with damages reduced by its percentage. At 51% or more the claim is barred.
Montana at a glanceMT
- Property damage
- 2 years
- Bodily injury
- 3 years
- Fault rule
- Modified, 51% bar
- Gov. notice
- None
Overview
Montana is the hardest state in the country for an insurer to recover ahead of its insured. The made-whole rule requires full compensation of every covered loss plus the insured's attorney fees and costs before the carrier takes a dollar, policy language cannot change that, and the carrier must find out whether the insured is whole before it subrogates. Later decisions measure 'whole' category by category, which keeps property damage subrogation viable once the property loss is fully paid, even if injury claims remain open. The second trap is time: claims for injury to property carry a 2-year limitation period under Mont. Code Ann. 27-2-207, one year shorter than the 3-year bodily injury period, while written contracts get 8 years. A 2023 statute added a 10-year product statute of repose and lets product defendants point to parties the plaintiff released. Comparative fault uses a 51% bar measured against all defendants combined, and only defendants more than 50% at fault are jointly liable. Montana is a traditional tort auto state with no PIP, and government claims run through the Montana Tort Claims Act with a $750,000 per-claim cap.
Quick reference with citations
- Property damage SOL
- 2 years
- Mont. Code Ann. 27-2-207 (injury to real or personal property)
- Bodily injury SOL
- 3 years
- Mont. Code Ann. 27-2-204
- Product liability
- 3 years for injury (27-2-204) and 2 years for property damage (27-2-207). A 10-year statute of repose measured from first sale or lease applies to product claims accruing on or after May 4, 2023 (Mont. Code Ann. 27-1-719, enacted by 2023 SB 216).
- Written contract
- 8 years
- Contract and indemnity recoveries
- Comparative fault rule
- Modified, 51% bar
- Mont. Code Ann. 27-1-702
- Government notice of claim
- No general statutory pre-suit notice
- Montana Tort Claims Act: claims against the State must be presented in writing to the Department of Administration before suit, and presentment tolls the limitation period for 120 days while the claim is considered (Mont. Code Ann. 2-9-301). There is no separate short notice deadline, so the ordinary 2-year and 3-year periods govern. Liability is capped at $750,000 per claim and $1.5 million per occurrence (2-9-108).
Fault rule in practice
How Montana's rule changes a $50,000 recovery.
The insured recovers if its negligence is not greater than the combined negligence of all parties it sues, with damages reduced by its percentage. At 51% or more the claim is barred.
Authority: Mont. Code Ann. 27-1-702
| Insured's share of fault | Recoverable in MT | Under pure comparative |
|---|---|---|
| 0% | $50,000 | $50,000 |
| 20% | $40,000 | $40,000 |
| 50% | $25,000 | $25,000 |
| 60% | Barred | $20,000 |
Doctrines that move the number
Montana doctrine checklist.
Made-whole doctrine
Montana applies the strictest made-whole rule in the country: the insured must recover every covered loss plus attorney fees and costs before the insurer subrogates, and policy language cannot change that (Skauge; Swanson). The insurer must determine whether the insured is whole before it pursues recovery (Ferguson). Van Orden v. USAA, 318 P.3d 1042 (Mont. 2014), measures 'whole' by category of covered loss, so property damage subrogation can proceed once the property loss is fully paid.
Economic loss doctrine
Montana takes an intermediate approach. Strict liability can reach damage to the product itself where the product's intended use foreseeably threatens the user's property, and negligence claims for purely economic loss are allowed against professionals such as engineers (Jim's Excavating Service, Inc. v. HKM Associates, 878 P.2d 248 (Mont. 1994)).
Joint and several liability
A defendant more than 50% at fault is jointly and severally liable; a defendant at 50% or less pays only its own percentage (Mont. Code Ann. 27-1-703). Contribution must be raised in the underlying action, because Montana does not allow a later stand-alone contribution suit.
Anti-subrogation and waiver
No subrogation lies against the insurer's own insured (Home Ins. Co. v. Pinski Bros., 500 P.2d 945 (Mont. 1972)). Montana courts have not decided whether a tenant is an implied co-insured under the landlord's policy, so landlord fire claims against tenants turn on the lease.
Practice notes
Working Montana subrogation files.
- 1
Calendar property damage at 2 years, not 3. Mont. Code Ann. 27-2-207 governs injury to real or personal property, and the more specific property statute controls over the general 3-year negligence period. A collision or water loss from January 2025 must be in suit by January 2027 against any non-signatory defendant, even if the occupant's bodily injury claim runs into 2028.
- 2
Run the made-whole math before any demand. If a $70,000 house fire leaves the insured with a $5,000 deductible, $8,000 of uninsured contents and $6,000 in attorney fees, a $50,000 recovery from the electrician first covers that $19,000, leaving $31,000 for the carrier. Swanson adds a second risk: if the insured settles directly for less than the full loss, the carrier's claim can disappear.
- 3
Fault is measured against all defendants combined, and joint liability attaches only above 50%. On a $100,000 trucking collision with the insured driver 40% at fault, the motor carrier 45% and a road contractor 15%, the carrier recovers $60,000 but must collect $45,000 and $15,000 separately, because neither defendant exceeds 50%. Raise contribution issues in that same action.
- 4
Montana's 2023 product liability law (SB 216) changes settlement strategy on product subrogation. Defendants in strict liability and warranty cases may now argue that a party the plaintiff released caused the damage, so an early, cheap release of an installer or retailer can shrink the manufacturer's share. The same law added a 10-year repose period for claims accruing on or after May 4, 2023.
- 5
Ishqkala places a made-whole hold on every Montana file: the opportunity is scored, but the demand package is not released until the adjuster records the insured's deductible, uninsured loss and fee position by category. The SOL engine uses the 2-year property period as the controlling date on any file with property damage.
Key cases
Skauge v. Mountain States Tel. & Tel. Co.
565 P.2d 628 (Mont. 1977)
An insurer has no right of subrogation until the insured has been made whole for its entire loss, including the costs of recovery. The decision established Montana's made-whole rule.
Swanson v. Hartford Ins. Co. of the Midwest
46 P.3d 584 (Mont. 2002)
Where the insured settled with the tortfeasor for less than her total loss, the insurer had no subrogation right even though the tortfeasor's limits exceeded the settlement amount.
Ferguson v. Safeco Ins. Co. of America
180 P.3d 1164 (Mont. 2008)
An auto insurer must determine whether its insured has been made whole, including the deductible, rental expense and fees, before taking a subrogation recovery.
Inter-company arbitration
Arbitration Forums handles Montana inter-company auto and property claims up to $100,000 in company-paid damages, but the made-whole rule follows the claim into arbitration. Resolve the insured's deductible and uninsured losses before or alongside the filing, or the recovering carrier risks a later claim by its own insured under Ferguson. Because property claims carry only 2 years, file against non-signatory defendants in court early rather than waiting for an AF decision on the signatory share.
How Ishqkala applies this guide
MT rules, built into every score.
- Opportunities with a Montana loss state are calendared against the 2 years property damage period or the 3 years bodily injury period, whichever controls the claim type.
- The insured's estimated fault share is applied under modified, 51% bar before recoverable dollars are scored.
- Public-entity claims are flagged for counsel review because notice and immunity rules vary by entity.
- Alerts fire at 180, 90, 45 and 15 days before the controlling deadline.
FAQ
Montana subrogation FAQ
2 years (Mont. Code Ann. 27-2-207 (injury to real or personal property)). A subrogating carrier generally takes the insured's claim subject to the same limitation period, usually measured from the date of loss.
Modified, 51% bar (Mont. Code Ann. 27-1-702). The insured recovers if its negligence is not greater than the combined negligence of all parties it sues, with damages reduced by its percentage. At 51% or more the claim is barred.
Montana Tort Claims Act: claims against the State must be presented in writing to the Department of Administration before suit, and presentment tolls the limitation period for 120 days while the claim is considered (Mont. Code Ann. 2-9-301). There is no separate short notice deadline, so the ordinary 2-year and 3-year periods govern. Liability is capped at $750,000 per claim and $1.5 million per occurrence (2-9-108).
Montana applies the strictest made-whole rule in the country: the insured must recover every covered loss plus attorney fees and costs before the insurer subrogates, and policy language cannot change that (Skauge; Swanson). The insurer must determine whether the insured is whole before it pursues recovery (Ferguson). Van Orden v. USAA, 318 P.3d 1042 (Mont. 2014), measures 'whole' by category of covered loss, so property damage subrogation can proceed once the property loss is fully paid.
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