This recent Ontario Court of Appeal decision makes it very clear that off-road vehicles (ie: ATV’s, dirt bikes, dune buggies, etc) must be insured under an automobile policy in Ontario, subject only to a few narrow exceptions.
There is a common underlying belief that if you use your off-road vehicle on your own property, or if you use your off-road vehicle in a competition (ie: on a race track or course), no insurance is required. The thought being that as long as it is not on public roads, no insurance is required: and conversely, the moment the off-road vehicle is driven on the public roads, insurance must be placed on the off-road vehicle. This logic often leads to the correct conclusion, but the logic is not proper and it is flawed.
According to the Ontario Court of Appeal, the issue isn’t whether the off-road vehicle is being used on public roads. Instead, the correct approach is to start with the premise that all off-road vehicles must be insured, unless the way the off-road vehicle is being used falls into one of two very narrow exceptions, being:
- The off-road vehicle is being used on your own property. Note that the legislation uses the phrase “on land occupied by the owner of the vehicle” (per section 15(9) of the Off-Road Vehicles Act, R.S.O. 1990, c. O.4), however, the appellate court confirmed that the term “occupied” must be given a very narrow interpretation, requiring the owner/operator to effectively be in complete control of the subject land – it is not, for example, enough that the driver leases a portion of the land, or it is not sufficient if the driver cannot exclude others from coming onto the land; and
- The off-road vehicle is “driven or exhibited at a closed course competition or rally sponsored by a motorcycle association.” (per section 2(1)5 of the General Regulation (to the Off-Road Vehicles Act), R.R.O. 1990, Regulation 863).
It was the second exemption that was under intense scrutiny by the appellate court. In this case, the owner/operator of a dirt bike was seriously injured during his participation in a closed course motocross competition in Ontario, sanctioned by the Canadian Motorsport Racing Competition (“CMRC”), a for-profit corporation, and organized by Stallybrass Promotions Inc. Competitors were only required to obtain a licence from CMRC and pay corresponding fees to participate in the event.
At stake was whether the severely injured owner/operator was entitled to statutory accident benefits (“SABs”) under a motor vehicle policy insuring one of his other vehicles. Individuals insured under an automobile policy are entitled to SABs if, amongst other things, their injury or impairment occurred during an automobile accident. An automobile accident requires, amongst other things, that the vehicle causing injury is one that must be insured by law. Hence the very question in this case was whether the dirt bike in this case had to be insured.
The owner of the dirt bike argued that the dirt bike had to be insured by law. The insurance company took the position that the dirt bike did not have to be insured because it fell squarely into the second exception: an off-road vehicle driven at a closed course competition sponsored by a motorcycle association (in this case the CMRC).
The appellate court sided with the dirt bike owner, and concluded that the exemption from insurance in section 2(1)5 of the General Regulation was not triggered. Why? According to the Ontario Court of Appeal (at para 65):
“The answer is found in s. 1 of Regulation 863 which defines a motorcycle association. A “motorcycle association” means a motorcycle club or association that has (or is affiliated with a motorcycle club or association that has): first, a published constitution and, second, a membership roster of more than twenty-four persons. The organizations must have a public constitution, are organized, and contain several members.”
Since neither CMRC nor Stallybrass Promotions Inc. fell within that definition of a motorcycle club, the exception did not apply, and by default the motocross bike had to be insured at the time of its operation.
The logic is that a motorcycle association will take care of all safety issues for the drivers and spectators thereby rendering it unnecessary for the participating off-road vehicles to have insurance. However, any event not run by a motorcycle association is considered riskier and hence not displacing the need to have the participating off-road vehicles insured.
It is abundantly clear the exceptions to the insurance requirement for motorized vehicles are being very narrowly construed by the court. Indeed, the appellate court wasn’t concerned in the least that some of these risks may not be insurable. In this regard, it is very possible that after an owner purchases insurance for their off-road vehicle that an insurance company will refuse to pay for damages caused to any third parties since competing in a race is an exclusion under the insurance policy. But the court reasoned that this is irrelevant because in other circumstances coverages may still be viable, such as claims for SABs which survives even if the injury was caused during a race.
In this case the plaintiff driver had auto insurance on another vehicle, and that coverage got triggered to provide him with SABs in this single vehicle accident on the basis that he was involved in an accident with a vehicle that had to be insured (even though it was not insured).
Ironically, this claimant/plaintiff received quite a windfall for not following the law – he was supposed to insure his motocross bike, and didn’t, but nonetheless still got rewarded with SABs: all of which seems a little incongruent with the theme of the legislation geared toward promoting everyone to purchase insurance on motorized vehicles. Indeed, the penalty for not buying automobile insurance for a vehicle that is required to be insured is that you are precluded from starting a tort claim to recover damages arising from the use or operation of a motor vehicle. Indeed, this plaintiff would have been prevented from suing another dirt bike owner/operator that was responsible for causing his injuries (ie: another participant who operated his motocross bike against the flow of traffic, by way of example). The corollary is that a tort lawsuit would be possible if the plaintiff had insured his motocross bike.
The Take Away
People who wish to operate their off-road vehicles without insurance must make certain that they are using such vehicles on the property that they have complete control over, or they need to be certain that the event they are participating in is being held by the mandated sponsorship.
Beaudin v. Travelers Insurance Company of Canada, 2022 ONCA 806
https://www.canlii.org/en/on/onca/doc/2022/2022onca806/2022onca806.html