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Part II .

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Non-Owned Automobile Insurance Liability Regulations

made under Sections 148 and 148D of the

Insurance Act

R.S.N.S. 1989, c. 231

O.I.C. 2013-115 (March 28, 2013, effective April 1, 2013), N.S. Reg. 186/2013

Citation

1 These regulations may be cited as the Non-Owned Automobile Insurance Liability

Regulations .

Definitions

2 In these regulations,

“Act” means the Insurance Act ;

“lessee” means a person to whom a motor vehicle is leased;

“rentee” means a person to whom a motor vehicle is rented.

Application to direct compensation for property damage

3 These regulations do not apply to an insured’s right of recovery for direct compensation for

property damage under

Section 138A of the Act.

Priority of payment for insurance held by lessor or renter

(1) The order in which the third party liability provisions of any motor vehicle liability

policies apply in respect of the following liability must be determined in accordance

with this

Section and

Section 5:

(

a) liability that arises from or occurs in connection with the ownership of a leased

or rented automobile; or

(

b) liability that, directly or indirectly, arises from or occurs in connection with the

use or operation of a leased or rented automobile.

(2) Except as provided in subsection (3), insurance available under a contract evidenced

by an owner’s policy issued to a lessor or renter is first loss insurance.

(3) Subsection (2) does not apply if there is insurance available under any of the

following contracts:

(

a) a contract evidenced by a motor vehicle liability policy under which the lessee

or rentee of the automobile is entitled to indemnity as an insured named in the

contract; or

(

b) a contract evidenced by a motor vehicle liability policy under which the driver

of the leased or rented automobile is entitled to indemnity as any of the

following:

(

i) an person who is a partner, officer or employee of an insured named in

an approved standard policy form (NSPF 6) for non-owned automobiles

that is part of the contract,

(ii) an insured named in the contract,

(iii) the spouse or adult interdependent partner of an insured named in the

contract who resides with that insured,

(iv) an unnamed insured.

(4) Subject to subsection (5), if subsection (3) applies, then the priority of pay among

insurers is as follows:

(

a) insurance described in subclause (3)(b)(

i) is first loss insurance;

(

b) insurance described in clause (3)(

a) is excess insurance to the insurance

identified as first loss insurance in clause (a);

(

c) insurance described in subclause (3)(b)(ii) is excess insurance to insurance

identified as excess in clause (b);

(

d) insurance described in subclause (3)(b)(iii) is excess insurance to insurance

identified as excess in clause (c);

(

e) insurance described in subclause (3)(b)(iv) is excess insurance to insurance

identified as excess in clause (d);

(

f) insurance described in subsection (2) is excess insurance to insurance described

in subsection (3).

(5) If more than 1 person is entitled to indemnity under a contract evidenced by a single

motor vehicle liability policy, each person is deemed, for the purposes of subsection

(4), to be entitled to indemnity under a separate contract evidenced by a motor

vehicle liability policy.

(6) If an insurer under a contract described in subsection (3) fails to respond to a claim

or civil action on behalf of a lessee, rentee or driver,

(

a) an insurer under a contract described in subsection (2) must respond to the

claim; and

(

b) the insurer under a contract described in subsection (3) who failed to respond is

liable to indemnify all of the following for any liability, costs and expenses

incurred as a result of the failure:

(

i) any insurer who responds to the claim or civil action under clause (a),

(ii) any insurer who responds to the claim or civil action under a contract

described in subsection (3), if the insurance described in the contract of

the insurer who responds is excess insurance in accordance with

subsection (4) to the insurance available under the contract of the insurer

who fails to respond.

Rateable proportion applies if priority not determined under

Section 4

5 If more than 1 insurer under contracts described in these regulations is required to respond

to a claim or civil action on behalf of a lessee, rentee or driver and the priority among the

insurance available under those contracts is not determined by

Section 4, each insurer is

liable only for its rateable proportion, as defined in subsection 148(3) of the Act, of any

liability, expense, loss or damage.

Acknowledging response to claim

6 An insurer who responds to a claim or civil action under a contract described in subsection

4(3) must acknowledge in writing to an insurer under a contract described in subsection

4(2) that the first-mentioned insurer is responding to a claim or civil action on behalf of the

lessee, rentee or driver.

Rights of unnamed insured

7 Despite

Section 118 of the Act respecting the rights of unnamed insured, a person insured

by but not named in an owner’s policy issued to a lessor or renter may recover indemnity

only to the maximum amount for which the lessor or renter is liable in respect of the same

incident in its capacity as lessor or renter as determined under subsection 148D(4) of the

Act.

Public passenger vehicle exemption

8 Subsection 148D(4) of the Act does not apply in respect of a motor vehicle that is a public

passenger vehicle as defined in the Motor Carrier Act .