Last week, I wrote about the standard used in determining a total loss in Washington. This week, I focus on Montana, Washington’s neighbor to the east. Montana has a “valued policy” statute similar to that of about 20 other states. The statute provides:

Whenever any policy of insurance shall be written to insure any improvements upon real property in this state against loss or damage and the property insured is considered to be a total loss . . . the amount of insurance written in such policy shall be taken conclusively to be the true value of the property insured and the true amount of the damages.1

Montana’s valued policy statute requires insurance companies to pay the full value of a policy in the event of a total loss. But what is a total loss in Montana? For a building, a total loss means:

[N]ot that the materials of which it is composed were all utterly destroyed or obliterated, but that the building, though some part of it may remain standing, has lost its identity and specific character as a building, and instead thereof has become a broken mass, or so far in that condition that it cannot be properly any longer designated as a building”2

So in Montana, just like in Washington, a total loss does not mean an absolute extinction of the property, but rather the question is whether the building loses its “identity.” Next week, onward to another state in search of total loss standards.

1 Montana Code section 33-24-102 (previous enactment R.C.M. 1947, 40-4302 the phrase “wholly destroyed” as opposed to “total loss” was used)
2 A.L. Meccage v. Spartan Insurance Co. (1970) 477 P. 2d 115, 117.