Home Insurance in Montana

WRITTEN BY: Amelia Ciffone

UPDATED: MAY 24, 2022 | 3 MIN READ

Montana is known as the treasure state – and there’s no better treasure than the home. Home insurance can protect that treasure, offering protection from threats ranging from fire to theft. Rates for home insurance in Montana are middle-of-the-road, with high home values and property crime rates offset by Montana’s relatively protected status from natural disasters. Wildfires, however, still pose a significant threat to Montana homes. Finding the best home insurance for you is in part a matter of research. Getting an idea of the average rates, policy types, and property risks of Montana can help you.

  • Fun fact:  Montana witnessed the largest observed snowflake on record – it was 15 inches wide!

Average Rates in Montana

Home insurance premiums in Montana are nearly perfectly average – when the Insurance Information Institute ranked all states by the average price of their premiums, Montana was right in the middle at 24th place, with $1,174 premiums. This is less than $100 over the national average of $1,211. Other states with middling insurance include New Jersey (average premiums: $1,192) and Wyoming (average premiums: $1,156).

Montana renters can expect savings should they purchase insurance. Montana is among the top five least expensive states for renter’s insurance, with premiums of $146. That’s $34 dollars beneath the national average of $180. The closest states to Montana in price are Iowa (average premiums of $144) and Wyoming (average prices of $147).

Montana Legal Insurance Requirements

The state of Montana doesn’t require you to get home insurance. But your mortgage lender can, and if you don’t choose a home insurance yourself, they can force you onto a more expensive insurance that benefits them.

All home insurance in Montana offers coverage for the following things:

  • Dwellings, which includes the structure of your home, all attachments to your home, as well as electrical and plumbing systems.
  • Other structures, meaning structures not attached to your main dwelling. This can include work sheds, barns, fencing, garages, driveways, and sidewalks
  • Personal Property, meaning items necessary to everyday living like clothing, furniture, and appliances. Luxury items (furs and jewelry for instance) have more limited coverage, and you may need to purchase additional endorsements to protect these items. Even if your possessions leave your property they continue to be insured – that means that a desk you move from your house to a dorm that then catches fire would continue to be covered
  • Additional living expenses. This coverage will help you maintain your normal standard of living if you need to temporarily move to a motel or apartment after damage to your home renders it uninhabitable. Notably this coverage is for “extra” costs, and can include expenses from food, lodging/rent, storage and moving costs.
  • Personal Liability. If you’re accused of negligence over your property or possessions and face a claim or lawsuit due to injury or property damage, this will help you pay for legal expenses. In Montana usually $100,000 of coverage is offered per claim, although you can obtain more coverage in exchange for higher premiums.
  • Medical payments: Not all injuries are due to negligence, however. In cases where a person besides yourself or your family is accidentally injured on your property, this will help pay for medical bills. The typical per-person limit is $1,000, but as with personal liability insurance, more coverage may be available if you’re willing to pay higher premiums.

With both personal liability and medical payments, there are important exclusions: if someone is injured due to professional service (like a roofer twisting their ankle on a ladder) or because of an intentional action (like assault) then homeowners insurance will not cover it.

In Montana, these types of coverages are offered in various “forms” which specify the kind of damaging events, or “perils” that the policy will insure. In Montana, these include:

  • Basic form: This offers limited coverage for 11 basic perils, including: fire/lightning, smoke damage, windstorm/hail, explosion, riot/civil commotion, aircraft, vehicles, theft, vandalism/malicious mischief, and glass breakage.
  • Broad form: In addition to basic coverage this protects your property from falling objects, weight of ice, snow or sleet, building collapse, bursting and leaking of pipes, and electrical shorts.
  • Special form: This is the most common of the forms, and will protect against any peril or damaging event not explicitly excluded within your insurance policy
  • Modified coverage form: This is a form with more restrictive coverage, reserved for homes that don’t meet the requirements for other kinds of homeowner policies, such as very old or depreciated homes.

Common Risk Factors in Montana

As a landlocked northwestern state, Montana is protected from several types of natural disasters. Hurricanes rarely trouble the region, and despite Montana’s location on the Intermountain Seismic Belt, major earthquakes rarely trouble the state. Occurrences of tornadoes rarely enter the double digits. There are, however, two kinds of natural hazards that pose a major risk to properties, according to the The Montana Department of Health and Human Services:

  • Wildfire. In 2019, Montana was within the top 10 states for the number of wildfires, based on data from the Insurance Information Institute. An estimated 29% of properties are threatened by wildfire. Fortunately, even the most basic of home insurance policies in Montana protect from fire damages – motivation enough to find a home insurance plan
  • Flooding. Particularly in the regions surrounding the Missouri River and the Yellowstone River, flooding from annual snowmelt and heavy spring rains pose a significant threat to properties, with the most recent major destructive flood occurring in 2011. Flood insurance is NOT covered by standard home insurance, and must instead be purchased through the National Flood Insurance Program. Your community must participate in the program for you to qualify, so coverage gaps remain in the state of Montana.

Insurance Demographics/Statistics in Montana

It may surprise you to know that the value of your home, while important, isn’t the only thing that affects the price of your home insurance premiums. Insurance companies generally increase the price of their policies or specific coverages if your home is considered “high risk” for filing an insurance claim. That means things like your proximity to a fire station, the property crime rates in your area, and even your personal characteristics as a homeowner can influence insurance prices. Below we explain some of the factors that insurance companies consider while setting the price for an insurance policy:

Your Home’s Value

The value of your home has the single greatest effect on the price of your home insurance, as well as the amount of coverage that you get. Insurance companies evaluate the value of your home based on either replacement cost or actual cash value. Replacement cost is the amount of money it would take to build a replica of your home using similar materials, and with current labor costs – this can change over time based on the market. Actual cash value differs from replacement cost in that it’s the amount of money you would get to sell or replace your home after depreciation from damage or wear-and-tear is taken into account.

Montana homes are on average valued at $288,867 – more expensive than the national average of $248,857. This usually increases premium prices. However, it’s important to remember that the sale price of your home is not the same thing as your home’s replacement or actual cash value. Part of the sale price of your home includes the value of the land that your home rests on, and land value is largely considered irrelevant by home insurance companies.

Local Crime Rates

Property crime is an insured peril by standard Montana insurance. To offset the risk of homes residing in areas with high rates of property crime taking out insurance claims, premium prices in these areas may increase. The FBI Uniform Crime Reporting Program reported a 2.23% rate of property crime in Montana (excluding auto theft). This is higher than the national average of 1.97% and may result in higher premiums.

Your Income and Education

Your personal characteristics as a homeowner can also have a bearing on the amount of money you’re asked to pay for your insurance. Generally speaking, those with good credit have a leg up on finding competitive insurance rates. Populations associated with having good credit include those in higher income brackets and with a college degree. Both household income and college educational attainment in Montana fall slightly below the national average. Information from the Census Bureau in 2018 reports a $55,328 average household income, compared to the $64,179 national average. Among those above the age of 25, 31.2% had earned a bachelor’s degree or higher, compared with 32.06% nationally.

Where To Purchase Home Insurance in Montana

Now that you’ve mastered the basics of Montana home insurance, the next step to finding the perfect policy is to compare the rates and plans of different insurance companies. Agilerates.com can simplify the task, offering accurate quotes from a wide range of insurers in your area. Both new homeowners and those with existing policies can benefit from a comparison of companies. According to the Pulse Whitepaper from iii.org, only 44% of homeowners compare prices of different insurers at renewal time, and only 17% do so online. That means more than half of all homeowners are leaving money on the table at renewal time. Use Agilerates.com online form to get matched with a local agent, get free quotes, and shop around!