Changes to Auto Legislation Re: Rented Vehicles

As you may already know, effective March 1, 2011, the Alberta Government enacted various changes to Alberta legislation relating to Third Party Liability insurance for rented vehicles.

The legislation changes priorities of payment in case of an “at-fault” accident with a short term rental vehicle (under 30-days). This only addresses Third Party Liability, and there is no change to how the physical damage is handled.

In the past it was the rental companies Auto Third Party Liability coverage which would respond to “at-fault” losses caused by the renter. This is no longer the case.

The first policy to respond is that of the renter, then personal insurance of the actual driver and lastly, the Third Party Liability of the rental company.

You can still transfer the Physical Damage exposure to the rented units by purchasing the “walk away” coverage from the rental company; however you are now legislated to assume the public liability associated with the operation of the rentals.

The coverage you, as the renter, need to ensure is adequate is the SPF #6 Non-Owned Automobile Liability. This coverage is offered as an extension from the Commercial General Liability.

This legislation could potentially have a great impact on your exposure to risk depending on the number of vehicles your organization rents or leases. If you are unsure about these limits, we encourage you to discuss this with your Lloyd Sadd team.