The appellant Economical Insurance appealed a motion judge's determination of the priority in which three insurance policies would respond to a motor vehicle accident claim.
The driver was covered under the vehicle owner's State Farm automobile policy, the owner's State Farm personal liability umbrella policy, and the driver's own Economical automobile policy.
The motion judge ordered that the State Farm auto policy respond first, followed by the Economical auto policy, and then the State Farm umbrella policy.
Economical argued that the umbrella policy was an owner's first loss policy under section 277(1) of the Insurance Act and should respond before the Economical policy, or alternatively, that both policies should respond rateably under section 277(2).
The Court of Appeal dismissed the appeal, holding that the umbrella policy was not an owner's first loss policy as defined by the Act and that section 277(2) did not apply to the Economical policy.