Insuring Off-Road Vehicles

Insuring Off-Road Vehicles

April 2014

Off road vehicles, which began getting popular in the 1970s, are capable of driving on and off paved or gravel surfaces. They have an enthusiastic following because of their many uses and versatility. These vehicles are most commonly used for sight-seeing in remoter areas which are distant from paved road.

Most off road vehicles have higher clearance and higher traction, which enable them to access trails and forest tracks. They also have a low ground pressure, so as not to sink into soft ground. Off-road vehicles are usually fitted with especially low gearing.

According to the Ontario Ministry of Transportation, off-road vehicles (ORVs) are any two or three-wheeled motorized vehicles. All-terrain vehicles (ATVs) are also off road vehicles but these have four wheels, the tires of which are all in contact with the ground; and they also come with steering handlebars. ATVs have a seat that is designed to be straddled by the driver; and are designed to carry a driver only and no passengers.

Insurance requirements

Increasingly, off-road vehicles in Canada are becoming more regulated and the minimum age of operation is slowly being raised.

By law, all off-road vehicles must be plated (even those that are only used on the owner’s property), and drivers issued a permit, by the Ministry of Transportation. These vehicles may not be driven on a highway, unless the driver has a valid driver’s or motorcycle licence.

Depending on where they are driven, an off-road vehicle must usually be insured by a motor vehicle insurance policy.  The driver and owner must carry evidence of insurance, in the same way a car owner is required to do so. Failure to provide proof of insurance when requested by a peace officer may result in a fine or penalty. The insurance requirement is waived where the vehicle is driven on land owned or occupied by the owner. This exception only applies to family members who operate off-road vehicles on their own properties. It does not apply to individuals who may bring their off-road vehicles for use on the property of others. For example, if a person brought their ORV to their friend’s property for the weekend, the owner of the vehicle would have to have insurance.

Insurance requirements for ORVs vary across Canada. For example, Quebec requires liability insurance cover of $500,000 to cover bodily injury and property damage caused by the vehicle, while New Brunswick and British Columbia require $200,000.

An ORV driver can also be charged with careless driving, if they drive an off-road vehicle “without due care and attention or without reasonable consideration for other persons”.  

Billion-Dollar Business

Off road vehicles are a billion dollar business in this country. According to the Canada Off-Highway Vehicle Distributors Council, more than 103,000 new units of motorcycles, scooters and ATVs plus parts and accessories were sold during 2012 at an estimated retail value of $1.45 billion.  ATVs accounted for 51% of total new units sold while motorcycles and scooters made up the remaining 49%. There were more than one thousand authorized motorcycle dealers and 875 authorized all-terrain vehicle dealers across Canada in 2012.

Statistics Canada reports that in 2010 (the latest year that such data is available), the number of off road vehicle registrations was 1.89 million.

Off road vehicles and injuries


Alberta leads the country in ATV sales, and use, with a yearly increase in sales of 50% over the past eight years.  The province now accounts for a quarter of all ATV sales in Canada. Unfortunately, the popularity of off road vehicles also has a dark side -- at one southern Alberta hospital alone, a study found that increase in ATV sales and use corresponded into a three-fold increase in traumatic injuries since 2001. A disproportionate number of victims are juveniles below 16 years of age.

ATVs are used by many children in rural and remote areas of Canada, including First Nations, Inuit and Métis communities.  For many families in remote communities, ATVs are the only form of transport. Thinly populated areas also seem to utilize ATVs more often. Statistics from a study done on Ontario ATV fatalities from 1996-2005 showed northeastern Ontario had a disproportionate number of them. Of 74 fatalities, 20% occurred in the northeast, which only has 6% of Ontario's population. The study showed 21% of ATV fatalities occurred in collisions with "immobile objects," mostly trees. Twenty per cent involved collisions with a second ATV or other vehicle and 13% were rollovers.

With knobbly, low-pressure tires and high centers of gravity, these vehicles are prone to tip over or go out of control on pavement, a factor that has been highlighted in many accidents involving ORVs. (A 1988 Canadian study indicated that tip-overs were responsible for 60% of injuries). These vehicles also lack many safety features that are standard for cars and trucks. That young children are allowed to drive them is too frequently a recipe for disaster, experts say.

Offroad vehicles and children

ORV injuries have been well-documented in children for at least 25 years. The injury rates in children and adolescents are concerning. The U.S. Consumer Products Safety Commission 2002 annual report shows that were 5239 deaths attributed to ATVs between 1982 and 2002. One third (1706) involved children younger than 16 years.

More recent figures in 2010, cited by the U.S. Consumer Product Safety Commission show that:

Canadian statistics also show disturbing trends.

A 1988 study of 207 patients over a 5-year period, which was published in the Canadian Journal of Surgery, showed that children younger than 16 years were more frequently involved in all-terrain vehicle or dirt-bike accidents, constituting more than one-third of the total sample group. The musculoskeletal system was most frequently injured (66%) followed by the head and face (25%). There was permanent disability in nearly 11% of the victims. One third of the recreational deaths were in children younger than 16 years (a similar proportion to the 2002 U.S. study). In 60% of accidents, the vehicle had rolled or flipped.[1]

This finding of the inherent instability of ATVs being a major contributory factor in accidents was also confirmed more recently by the Alberta Centre for Injury Control and Research.  Between 2002 and 2009, 17 Albertans under 16 years of age died in ATV-related incidents.  Males from 15 to 24 years of age had the highest rates of hospital admissions and emergency department visits, followed closely by boys from 10 to 14 years of age.[2] The leading cause of ATV deaths among children and youth was rolls or flips on flat terrain.  The second leading cause was collisions with other vehicles.

The Canadian Pediatric Society released a position paper in 2012 on preventing injuries from the use of all-terrain vehicles. It noted that in this country, the rate of ATV-related injury hospitalizations for all ages rose 57% between 1996 and 2004, with absolute numbers increasing from 1700 admissions in 1996/1997 to over 2800 in 2004/2005. Males accounted for 70% to 85% of injuries. 

Thirty-four per cent of these incidents involved children and youth 0 to 19 years of age, with 16% aged five to 14 years and just over 17% aged 15 to 19 years. Inexperience, inadequate physical size and strength, a higher tendency to engage in risky behaviours all aggravate the injury risks for children and youth operating ATVs. While industry guidelines suggest that children under 16 years of age should only operate youth-sized models, these vehicles are still heavy and can travel at significant speeds. Currently, there is little evidence to suggest that smaller youth models are safer when used by children, the pediatric society pointed out. 

Inconsistent helmet use has also been flagged in research as being a significant cause of death. A University of Alberta study showed an average of 14 ATV-related deaths per year between 2002-2011.  Slightly more than two-thirds were not wearing a helmet at the time of their death, and nearly half of the children who died (43%) were not wearing a helmet.

New Legislation


A check of the minimum age for operating ORVs reveals a variation across Canada. Quebec, Newfoundland and Labrador stipulate a minimum age of 16 to independently operate adult sized ATVs. Quebec also requires drivers aged 16-17 to possess a certificate of competency. The minimum age requirement ranges from 12-14 years in other provinces. Both British Columbia and the Yukon are also enacting legislation that will impact the use of ATVs, in a bid to protect drivers and the environment, a move some have criticised as belated, but an important first step.

British Columbia


Off-road vehicles will soon need to be registered with licence plates when used in public places, as part of new legislation proposed by the British Columbia government earlier this year. The changes will also make it mandatory for drivers to have helmets according to the bill introduced by Forests, Lands and Natural Resource Operations Minister Steve Thomson. “One of the key pieces of rationale for the legislation was to be able to enforce a level of standard on those rogue operators out there,” said Thomson.  The bill passed its third reading on March 24, 2014.

The new rules were first proposed in 2009.The law would force people to register their ATVs, dirt bikes, quads and snowmobiles with the Insurance Corp. of B.C. and pay a one-time $48 fee. Registration would only be required if a person intended to ride on Crown land, across roadways or on other public property. Operating an ATV on private property would not fall under the rules.

The proposed bill also calls for mandatory use of helmets and would also give police authority to stop and fine operators, and in some cases even seize vehicles, for operating snowmobiles, trail bikes and quads dangerously, in commission of a crime or for damaging sensitive environmental habitat. The maximum fine for offences would also be raised to $5,000 from $500.

The legislation would establish a registration system and a database that would be administered through the Insurance Corporation of British Columbia. This would allow law enforcement to more easily identify vehicles and owners. Snowmobiles have been registered in B.C. since the 1970s, but there is no database for investigators to track down rightful ownership of stolen off-road vehicles.

New Brunswick


Last year, the New Brunswick government also proposed changes to the Off-Road Vehicle Act in the province, mainly aimed at improving safety. The changes widen the definition of "all-terrain vehicle" to include side-by-side off-road vehicles, utility vehicles and amphibious vehicles; implement consistent standards for safety equipment. The regulations also implement placement standards for licence plates and trail permits; bans trail use by those convicted of driving under the influence. The proposed legislation also broadens the types of acceptable written authorization (in addition to leases) to identify a managed trail.

The Yukon


Off road vehicles are very destructive when they are used inappropriately.  A 2001 report highlighted the environmental damage wreaked by ATVs –- ecological damage from motorized recreation was seen in the grasslands, wetlands and alpine areas of the province, leading to compaction of soil, erosion of soil, spread of noxious weeds. In 2011 the British Columbia government passed laws banning ORV activities that damage Crown lands. For example, irresponsible off-roading with ORVs, motorcycles or 4x4s, sometimes referred to as mud bogging, disrupts the ecological environment, sometimes causing catastrophic damage.  Violation tickets for mud bogging are $575, and other possible penalties include towing or impoundment of vehicles, jail time and expenses related to habitat restoration. [3]

Last November, the Yukon Energy, Mines and Resources Minister Scott Kent tabled Bill 64 to amend the Territorial Lands (Yukon) Act that will address the impact of off-road vehicles on environmentally sensitive areas of public land. The Bill was passed in December 2013.

“The Yukon government is beginning to implement the recommendations of the Select Committee on the Safe Operation and Use of Off-road Vehicles,” Kent said. “The proposed amendment addresses many aspects of the Select Committee’s Recommendation 14 – particularly the need for effective regulation and enforcement to protect the environment from damage caused by off-road vehicles.”

The amendment will allow the Yukon government to develop a range of measures to protect the ecological balance of an area. The government is planning to conduct a full public engagement to help develop regulations. When necessary, the regulations will exclude off-road vehicles from specific types of land or habitats.

When an ATV is a “Self-Propelled Implement of Husbandry”


Last year, the Ontario Superior Court of Justice ruled that a farmer who was catastrophically injured while driving his uninsured ATV on a public road in 2008, was exempt from insuring his ATV because it was a “self-propelled implement of husbandry “. Arthur Matheson and his family were initially barred from making a claim against Lanark Mutual Insurance Company and the driver who had collided with him because the ATV was uninsured at the time of the accident.

The defendants argued that Matheson's ATV met the definition of "automobile" under the Insurance Act because it is a self-propelled vehicle and should have been appropriately insured.

The central issue facing the court was whether Matheson's ATV was a "self-propelled implement of husbandry." Judge Pedlar ruled that although some ATVs are purchased for recreational use only, a reasonable person "would readily discern the character and function of the vehicle driven by ... Matheson ... as being an implement manufactured and designed for a specific use in farming and animal husbandry." Therefore it would not have been a “motor vehicle” for the purpose of section 2 of the Compulsory Automobile Insurance Act.

Justice Kenneth E. Pedlar also noted in his written judgment that farming practices have changed dramatically. His agreement meant the ATV did not have to be insured despite it being on a road.

Snowmobile coverage clarified


In McLean (Litigation Guardian of) v. Jorgenson [2005] O.J. No. 5207, the Court of Appeal for Ontario addressed the issue of whether an automobile insurer had the duty to defend an action commenced by a plaintiff, Adam McLean, who suffered a below-the-knee amputation while he was holding the rear end of a snowmobile off the ground as another person revved the engine in hopes that it would start better. The defendants looked to their automobile insurer, TD General Insurance Company, to defend the action. TD denied coverage. 

The court wrote that in relation to a motor vehicle, the duty to defend arises when there is a possibility that the injury arises from the “ownership, use or operation of a motor vehicle.” It followed a test to determine the use or operation of the vehicle, following the two-part test found in Amos v. Insurance Corp of British Columbia, 1995 66 (SCC), [1995] 3 S.C.R. 405 at 415. 

That test is:

1. Did the accident result from the ordinary and well-known activities to which automobiles are put? 

2. Is there some nexus or causal relationship between the appellant’s injuries and the ownership, use or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous.

There was no dispute over the fact that the plaintiff’s injuries arose out of the operation of the snowmobile, as attempting to start a motor vehicle is an ordinary and well-known activity. While there was some argument over whether having a person lift the rear of a snowmobile while it is being started is part of an ordinary activity, the court concluded that the act of lifting the rear of the snowmobile could not be viewed in isolation and found that, in this case, it was inextricably linked to starting and revving the engine.

[1] Allan DG., Reid DC., Saboe L (1988) Off-road recreational motor vehicle accidents: hospitalization and deaths. Canadian Journal of Surgery. July; 31(4):233-6.

[2] Alberta Centre for Injury Control & Research Press Release: “One size does not fit all.”

[3] British Columbia Ministry of Forests, Lands and Natural Resource Operations (2011). B.C. takes firm stand against mud bogging. April 28. Press release.


ADVANTAGE Monthly trends papers

This paper is part of an open online library of ADVANTAGE Monthly trends papers, published by the CIP Society for the benefit of its members and of the p&c insurance industry. The trends papers provide a detailed analysis of emerging trends and issues, include context and impact, and commentary from experts in the field.

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