The old saying goes that there are only two certainties in life: death and taxes. An appropriate addition for the 21st century is insurance. Can you get by without insurance? Yeah, but just barely. Everything is insured.
Today, our question is about whether or not there is anything, in particular, you need to know about insuring a car (or cars) that a Montana LLC owns.
Is There Anything Special About Insurance for a Montana LLC?
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You probably know little about the Montana LLC process by now if you’ve been following our Montana LLC series of articles. If you haven’t read through them, go ahead and click the link and review our articles. Also, be sure to check our extensive FAQ section dedicated solely to LLC questions.
Now, is there anything particularly special about insuring your car, truck, or RV in Montana?
Interestingly enough, the answer is no!
In fact, it will stay largely the same as your current insurance policy.
You can continue to use whatever insurance company you want to use and that you have been using. Your insurance will remain in whatever state you live in and will not change appreciably at all. The only difference is that you will add your LLC to your policy as an additional interest.
Now, one thing we can tell you is that most insurance companies struggle with anything outside the norm, like a vehicle registered to an LLC in Montana. Regular insurance companies don't have a clue what to do with that, and we know that from experience. We’ve spent the better part of a decade finding the best insurance companies that know their stuff – check them out on our Insurance page along with some helpful advice for making sure your calls with insurance go as smoothly as possible.
What Is an ‘Additional Interest?’
Ok, so this brings up an important question and distinction: what is an ‘additional interest?’
Unlike ‘additional insured’ parties on a policy, which speak to additional drivers or users, additional interests are entities with a vested interest in the insurance policy remaining active.
It is interesting because the additional interest is still you in your Montana LLC case. Well, it’s sort of you. It is you in the sense that you own both the LLC and the vehicle in the LLC. It is not you in the eyes of the law; the LLC is its own entity that has an interest in your vehicle remaining legal and insured.
The additional interest is notified of any changes in coverage, lapses in coverage, etc. Keep in mind that lapsed insurance coverage could negatively impact the LLC when it is attached to the policy as an additional interest.
Which State Does My Insurance Policy Need to Be From?
Vehicles registered to an LLC need to be insured in the state where they actually reside. For example, a truck registered to a Montana LLC but garaged and driven in Maine would need to have a Maine insurance policy. This is largely based on two factors: where a vehicle is garaged and where it is most commonly driven.
If you have an odd situation, it’s worth asking your insurance company which state’s policy you need. Maybe you live in one state and work in another, or maybe your fleet vehicles are often driven in the next state over. That brings us to another topic – insuring fleet vehicles are registered to a Montana LLC.
How About Insuring a Fleet of Vehicles in a Montana LLC?
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One of the benefits of our Montana LLC program is that you can add as many vehicles as you like. We also offer a program to add additional assets to your Montana LLC, which includes fleet vehicles.
Why?
If you live in a high sales-tax state, adding to your fleet of vehicles can be a real nightmare. Take a $40,000 baseline for each vehicle, multiply it by ten vehicles, and you have $400,000 in vehicular assets. Now assume your business is in a location with around ten percent sales tax.
You’re in the hole for forty grand in sales tax. As if running a small business wasn’t hard enough, you are losing the value of an eleventh truck to sales tax.
Regarding insurance for your fleet, that is up to your state requirements. The vehicles in your Montana LLC are being operated in your state and need to be insured in your state. You will need to add your LLC to your insurance policy as an additional interest. Whether or not you need commercial insurance is up to your state’s rules; having the vehicles in a Montana LLC has no bearing on what type of insurance you need whatsoever.
What Insurance Do I Need for My RV With a Montana LLC Registration?
Any standard RV insurance policy is fine for your Montana LLC. Like the previous submissions, there are no special requirements for RVs; you must have insurance, it needs to be in your home state, and your Montana LLC will go on the policy as an additional interest.
We recommend our Montana LLC RV service for several reasons, especially with high-end RVs. First, if you are a digital nomad and your RV serves as your home office and home, you can claim it under Section 179. This could maximize your tax savings, and considering our Montana LLC service reduces the sales tax to zero, there’s the potential for massive savings when you combine the two.
Also, you will not have any state smog or inspection requirement; plus, once the RV is eleven years old or older, it becomes permanently registered in Montana, and you never have to register it again. Remember, you still have to keep your Montana LLC active unless you actually move to Montana.
We also offer a South Dakota RV registration option. This program is less cost-effective in the long run, but with a sales tax rate of only 4%, it is still very attractive for people coming from rates of ten percent. The main benefits of a South Dakota registration are:
Low sales tax (Montana is our only option with no sales tax).
No LLC or residency requirement.
The vehicle can be financed
You cannot have a financed vehicle in a Montana LLC. If this applies to you, see below for more information.
How About My UTV With a Montana LLC Street-Legal Registration?
Montana has registered and tagged OHVs for years. It makes sense when you look at the sheer size and scope of the state compared to its sparse population density. It has always made sense to allow OHVs on the public roadways in Montana because the state is so rugged with so few people.
We offer a UTV registration program for you to get your UTV off the trailer and on the road with a Montana LLC.
Our Montana LLC insurance requirements for UTVs are common to having an LLC; you need to have an insurance policy that recognizes your UTV as a road-going, street-legal machine.
Trouble is, most insurance companies struggle with anything outside the norm, like insuring a street legal UTV, ATV, dirt bike, or military vehicles like Hummers and LMTVs. Regular insurance companies don't have a clue what to do with those things, and we know that from experience.
We’ve spent the better part of a decade finding the best insurance companies that know their stuff – check them out on our Insurance page along with some helpful advice for making your calls with insurance go as smoothly as possible.
Do I Need Commercial Auto Insurance Since It’s an LLC?
You do not need to have a commercial auto insurance policy for your vehicle or vehicles just because they are in a Montana LLC. As long as you have an insurance policy in your home state, you will add your Montana LLC to the policy as an additional interest.
The additional interest doesn’t change anything for you at all. You own the LLC; the additional interest is still yours. It’s just a box to check. Otherwise, registering your vehicle(s) in a Montana LLC changes nothing about how you insure them unless it is the vehicle types identified above. Those special types of vehicles (OHVs & military vehicles) may need to be insured by specialists. If you use a vehicle for commercial purposes, that are also another thing to consider, but the LLC by itself does not require you to have commercial insurance.
Anything Else?
Here at Dirt Legal, we strive to make this process the easiest thing you deal with today. Since the Montana LLC program is a little more involved than other registration processes, we want to help you as much as possible. To do this, we also offer:
A quick note: If you are financing, there is still a way to go the Montana route. We prefer LightStream, a lender who offers a loan as cash, so there is no lienholder on the title. If you are currently financed and want to use our Montana LLC registration service, you can refinance with LightStream, who will loan you cash to pay off your financing. You will then hold the title and can move ahead with our Montana LLC program with whatever you want to register. If that’s all a bit much, you can check out our other vehicle registration services that do not involve an LLC.
As a LightStream affiliate, we may be compensated if you use their services through the links on this page. LightStream did not commission, sponsor, or fund this post.
On top of that, if you have questions along the way, don’t hesitate to give us a call and ask. We’ll try our best to get you the answers and services that you need!
John McCoy is a lifelong car and truck enthusiast and has a strong mechanical background off the road. He spent over 13 years in the U.S. Air Force as a crew chief, assigned to the B-1B Lancer, affectionately known as the Bone to those in the community, and the KC-135R Stratotanker. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment.