Canadian Underwriter

Alberta extends $1-million liability cap on rental companies to vehicle sellers, financers

December 3, 2010   by Canadian Underwriter

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Alberta’s Superintendent of Insurance announced a series of legislative changes extending the liability cap of $1 million that exists for rental and leasing companies to people selling or financing vehicles through formal arrangements.
The legislative changes come into force on March 1, 2011. They will:

  • implement a $1-million limit (or greater amount determined by regulation) on the liability of owners of leased, rented, conditionally sold or financed vehicles when their vehicles are operated by a lessee, rentee, buyer or other driver;
  • change the priority of which motor vehicle liability policy is responsible for the payment of damages caused by the operation of these vehicles; and
  • exempt owners that are the lessors, renters, sellers or financers of commercial vehicles used or intended to be used to transport passengers from the $1 million of liability (or greater amount determined by regulation) where the lessors etc. are in a non-arm’s length relationship with the day-to-day operator of the vehicle.

The legislative changes come under sections 12, 13 and 14 of the Traffic Safety Amendment Act, 2007, section 9 of the Traffic Safety Amendment Act, 2009, the Commercial Vehicle Certificate and Insurance Amendment Regulation and the Miscellaneous Provisions Amendment Regulation.
Alberta capped the liability limit of vehicle leasing companies when their vehicles are operate by lessees at $1 million in 2007. Two years later, the cap was extended to car rental companies. With the legislative change, the cap will also apply to persons selling or financing vehicles through formal arrangements and retaining title to the vehicle until they are fully paid for the vehicle, a bulletin from the Superintendent of Insurance says.

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