Go-kart Insurance Revisited: The Automobile Insurance Debate

August 27, 2007

By Brian Babcock

Go-karts and similar recreational “toys” are particularly difficult to ensure, because, although they are vehicles, they are not automobiles, and therefore, automobile insurers are unlikely to insure them.

Recently, a motions court judge in Southern Ontario considered an incident involving an amusement park go-kart. This judge extended coverage to the non-owned go-kart because, under Ontario’s Insurance Act , the definition of ‘automobile’ had been extended to include motor vehicles that are required to be insured. Under the Compulsory Automobile Insurance Act , motor vehicles must be insured if they fit the definition of motor vehicles under the Highway Traffic Act .

Still with me? Good, because we are almost at an answer.

The Highway Traffic Act’s definition of a motor vehicle includes any vehicle propelled otherwise than by muscular power. In other words, if it powered by you (or your horse) then it isn’t a motor vehicle, but if it has any type of motor or engine, then it is a motor vehicle. Therefore, the judge decided that a go-kart is an automobile, and the provisions of the auto insurance of the operator of the go-kart, which included coverage for non-owned automobiles, applied and covered him for third party liability (law suits by others who he injured).

This surely will come as news to many, even within the insurance profession.

This decision reflects only one motions judge’s opinion, and an appeal court might well decide otherwise in the future. I have concern in particular about the step in his analysis in which the judge decides that the go-kart is an automobile because it would need to be insured if it was operated on a highway (or street). Since go-karts are NOT intended to be operated on streets, does the simple ability to do so require go-kart owners to have coverage on their automobile insurance?

The Off Road Vehicles Act does not clearly deal with go-karts. At most these vehicles seem to fit within the definition of “dune buggy”, and therefore, need to be insured as motor vehicles. However as the accident in this case occurred at an amusement park, that law was not considered.

This case is a useful reminder of the importance of assessing all of our personal risks, and making sure we buy the right coverages. If the operator owned the go-kart, it would only be covered if it were a described automobile on his policy. Off road vehicles and such mechanical “toys” are increasingly popular and this popularity may have increased the market for protection. It is clear, however, that a prudent owner would not operate their go-kart without insurance.

Special risks require special effort, but the disasters of not being insured make the effort worthwhile.