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Old 09-02-2011, 10:34 AM   #1
Christien
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Default Court decision re insurance coverage at the track

As I mentioned in the other thread, here's the Ontario Superior Court decision that answers the question as to whether insurance coverage will apply at the track.

The long and short of it is that they can't deny your claim, provided you're not racing, using timing devices, or observing a start/finish line. Racing is defined in the decision as "vehicles operating at high speed, in close proximity, over a fixed distance; abrupt lane changes; blocking; bold manoeuvres; jockeying for position; and high-risk passing."

This is public court record, so there's no privacy issue with posting the information.


Carnell et al. v. Aviva Canada et al.
[Indexed as: Carnell v. Aviva Canada]


105 O.R. (3d) 429

2010 ONSC 6359

Ontario Superior Court of Justice,

Mullins J.

December 2, 2010*

Insurance -- Automobile insurance -- Exclusions -- Insured losing control of his vehicle while par-ticipating in driver education event at racetrack -- Event designed to teach participants to drive at higher speeds in controlled environment -- Racing and timing devices prohibited -- Insured not using automobile in race or speed test at time of accident.

The insured owned a modified Porsche. He was participating in a driver education event operated by the Porsche Club of America at a racetrack when he lost control and rolled the vehicle. Section 4.2 of Statutory Conditions -- Automobile Insurance, O. Reg. 777/93 prohibits use of an automobile in a race or speed test. The insured applied for a declaration that he did not fall within that exclusion at the time of the accident.
Held, the application should be granted.
The driver education event was designed to teach participants to drive at higher speeds in controlled environments. Racing and timing devices were not allowed, and there was no start or finish line. A race is a test between rivals. Factors common to a race are as follows: vehicles operating at high speed, in close proximity, over a fixed distance; abrupt lane changes; blocking; bold manoeuvres; jockeying for position; and high-risk passing. At the time of the accident, the insured was not en-gaged in a competitive activity that met the definition of a race, nor was he seeking to test the speed of his vehicle.

Cases referred to
Blackstock v. Insurance Corp. of British Columbia, [1982] B.C.J. No. 1480, 138 D.L.R. (3d) 563, 38 B.C.L.R. 339, 15 A.C.W.S. (2d) 387 (S.C.); Gore Mutual Insurance Co. v. Rossignoli, [1964] 2 O.R. 274, [1964] O.J. No. 758, 45 D.L.R. (2d) 216 (C.A.); [page430] McGuiness v. Canadian Gen-eral Insurance Co., [1976] B.C.J. No. 82, 66 D.L.R. (3d) 161, [1976] I.L.R. ┬1-740 at 106 (S.C.); Mildner v. Saskatchewan Government Insurance Office, [1962] S.J. No. 85, 40 W.W.R. 86, [1962] I.L.R. ┬1-076 at 367 (Q.B.); R. v. Flannery, [1982] O.J. No. 1885 (C.A.); R. v. Machado, [2010] O.J. No. 387, 2010 ONSC 277, 92 M.V.R. (5th) 58
Statutes referred to
Insurance Act, R.S.O. 1990, c. I.8 [as am.]
Rules and regulations
Statutory Conditions -- Automobile Insurance, O. Reg. 777/93 (Insurance Act), s. 4.2

APPLICATION for a declaration that the insured did not fall within the statutory exclusion at the time of the accident.

Bruce Jaeger, for applicants.
Andrew Davidson, for respondents.




[1] MULLINS J.: -- The applicants seek a declaration determinative of the applicant's claim for $51,250, pursuant to the terms of an automotive insurance policy issued by the respondent. The en-titlement depends upon the interpretation of whether or not the activities of the applicant Johan Carnell, at the time the loss, fall within the exclusion expressed in s. 4.2 of Statutory Conditions -- Automobile Insurance, O. Reg. 777/93 (Insurance Act). This prohibits use of the automobile in a race or speed test. The parties ask this court to determine the question on the basis of the material filed, there being no material issues as to fact.
The Facts
[2] The applicants owned a 1986 Porsche 911 coupe. The vehicle had been purchased in 1996 and modified in 2001, such that it was rebuilt to 3.3 turbo Porsche specifications. With the modification, the vehicle had an estimated output of 450 to 500 horsepower.
[3] On July 24, 2009, Mr. Carnell, while participating in an event at the Mosport International Raceway, lost control and rolled the vehicle. The vehicle was a total loss.
[4] Mosport International Raceway is promoted as a world renowned racetrack, designed to chal-lenge a driver's control over his car. It is a facility which permits high-speed operation of motor ve-hicles and features abrupt elevation changes combined with camber changes.
[5] The applicant is a member of the Porsche Club of America. The Porsche Club of America operates driver education events at the Mosport International Raceway and has done so since 1988. [page431] The applicant was operating his Porsche on the Mosport track during one of these events.
[6] The stated purpose of the events according to the Porsche Club of America is to deliver edu-cation and opportunity for the driver. It fosters safe and enjoyable exploration of a driver's skills and the performance characteristics of their automobile.
[7] According to the driver education handbook of the club, drivers are required to have helmets and have numbers on their car. Various flags are utilized regarding track conduct, including a checkered flag.
[8] The applicant describes the driver education events as closely monitored programs in which participants learn to drive at higher speeds in controlled environments.
[9] The events have rules regarding driving activities to address the safety of the participants and their cars. Racing is not allowed. Timing devices are not permitted. The events have no timing, scoring, start or finish line. Participants drive in designated groups of those considered to share the same level of skills. The type of vehicle is not a consideration in selecting the group, only the driver skills.
[10] The programs are designed to allow participants to learn and practise advanced driving skills. As the skill of the driver improves, the driver may progress to more advanced groups.
[11] The events are monitored by instructors, who are trained by the Porsche Club of America. Passing is only permitted in designated zones and only after the car ahead signals to the other ve-hicle that it may pass and on which side of the vehicle they should pass. The events are monitored by event officials to ensure the rules are being adhered to and to redress any breach of the rules.
[12] Mr. Carnell was participating in an instructor's session at a Porsche Club of America Driver Education event being held on the weekend when the loss occurred. He was driving between 90 and 100 kilometres per hour. It was 15 minutes into a 20-minute session. His crash occurred with no other vehicles in sight.
The Law
[13] The terms "race", or "speed test", are not defined in the Insurance Act. Each term may be considered to have different meanings. Mildner v. Saskatchewan Government Insurance Office, [1962] S.J. No. 85, 40 W.W.R. 86, [1962] I.L.R. ┬1-076 at 367 (Q.B.), cited by the respondent, says that a race is a contest [page432] involving speed, whereas a speed test connotes merely a test of speed. In Mildner, the driver was attempting to determine the maximum speed at which he could navigate the track, while taking practice laps before a race. There were no other vehicles on the track. In McGuinness v. Canadian General Insurance Co., [1976] B.C.J. No. 82, 66 D.L.R. (3d) 161 (S.C.), the plaintiff was considered to be in a speed test, as he was trying to determine the maximum speed at which his car could travel a measured quarter-mile.
[14] Blackstock v. Insurance Corp. of British Columbia, [1982] B.C.J. No. 1480, 138 D.L.R. (3d) 563 (S.C.) was cited to illustrate the significance of the event taking place on a racetrack or drag strip.
[15] Factors common to a race are vehicles operating at high speed, in close proximity, over a fixed distance; abrupt lane changes; blocking; bold manoeuvres; jockeying for position; and high-risk passing.
[16] A race is a test between rivals, according to R. v. Machado, [2010] O.J. No. 387, 2010 ONSC 277; Gore Mutual Insurance Co. v. Rossignoli, [1964] 2 O.R. 274, [1964] O.J. No. 758 (C.A.); and R. v. Flannery, [1982] O.J. No. 1885 (C.A.).
[17] Counsel agree that the rule of interpretation to be applied to an exclusion within an insurance contract is that it is to be strictly and narrowly interpreted.
[18] I conclude that Johan Carnell was, on July 24, 2009, when he crashed and rolled the vehicle insured by the respondents, exercising his driving skills in an environment which was, by design and intended purpose, such as to challenge his skills and the performance attributes of his vehicle. He was not, however, engaged in a competitive circumstance that would meet the definition of a race, nor was he seeking to test the speed of his vehicle, when and where he lost control and crashed. I find, therefore, that his conduct does not fall within the exclusion from coverage. The applicants are entitled to indemnity under the contract of insurance.
[19] Counsel may make submissions as to costs within 30 days.


Application granted.
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Old 09-02-2011, 10:42 AM   #2
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wow.

I would have never thought that to be the case. I can see everyone's premium's going up.

I wonder if the insurance company can now sue Mr Carnell? I mean it was driver error that led to the crash was it not?

Lovely,
P
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Old 09-02-2011, 11:13 AM   #3
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Pretty much all crashes are driver error, one way or the other, whether it's doing something while driving, or improper maintenance of the car. In fact, I'd take a wild guess that less than 10% of accidents are truly unpreventable (blowout on a near-new tire, for example). I'm sure he'd have to pay the deductible out of pocket, but I don't see how the insurance co. could sue him.
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Old 09-02-2011, 11:18 AM   #4
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I think the question is whether he had declared his mods. If you modify a car from standard and have an accident this can easily invalidate your insurance,,,,,
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Old 09-02-2011, 11:29 AM   #5
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wow that was just way to much reading this early ..
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Old 09-02-2011, 01:53 PM   #6
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wow interesting. can insurance companies just modify their policies to exclude "driver training exercises"?
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Old 09-02-2011, 02:23 PM   #7
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Reading the fine print I don't think a Rennlist day would be covered?
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Old 09-02-2011, 02:25 PM   #8
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Quote:
Originally Posted by Ronan View Post
I think the question is whether he had declared his mods. If you modify a car from standard and have an accident this can easily invalidate your insurance,,,,,
$51,250! The car was appraised for sure
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Old 09-02-2011, 03:10 PM   #9
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The breaking point would be whether the activity qualifies as racing, as defined, or not. Pretty much any lapping day would not qualify as racing as that judge defined it. Now, if you're timing your laps, then you might be in trouble. If you're competing with someone else, or driving like and *** and "jockeying for position", blocking, changing lanes abruptly, etc. then you might be in trouble. But otherwise, all of the lapping days I've ever been to would not qualify as racing, and would thus be covered.
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Old 09-02-2011, 03:11 PM   #10
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Quote:
Originally Posted by jasonintoronto View Post
wow interesting. can insurance companies just modify their policies to exclude "driver training exercises"?
This isn't a decision about a policy, but about the insurance act. As I understand it, insurance companies can't just make up any arbitrary rule to their policy (or at least, if they do, it's not enforceable). They have to abide by the laws. It's really the same as any contract. For example, I can't enter into a contract to you to kill you, even if you agree to it. It's still illegal.
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Old 09-02-2011, 03:36 PM   #11
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Sure wish that was the case in the States....the insurance companies here have spent the last few years putting exclusions regarding anything that says "racing", "race track", etc. into all policies....basically, if you're on a race track, you're not covered by your standard policy.

Gary
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Old 09-02-2011, 06:04 PM   #12
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Was this or is this being appealed by the insurance co? I have heard it was and Johan requested pca to pay his lawyer fees.
Good find Chris.
Btw the amount of damage at tracks from lapping should not have any real effect on everybody's premium.

Last edited by Turbodan; 09-02-2011 at 08:39 PM. Reason: typo
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Old 09-02-2011, 08:59 PM   #13
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In the two cases that I'm closely familiar with where insurance covered significant track incidents, it was critical that the event be educational. ie no timing anywhere and instructors on site. One co even interviewed the instructor who was said to have been in the car.
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Old 09-03-2011, 08:29 AM   #14
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Thanks for posting. I'm not doing many HPDEs anymore, but it's good to know that it's been challenged in court.
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Old 09-05-2011, 11:13 AM   #15
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Quote:
Originally Posted by Christien View Post
I'm sure he'd have to pay the deductible out of pocket, but I don't see how the insurance co. could sue him.
1. No deductible on write off's now - since 2008 court ruling. I wrote off a car after center punching a deer and the following year was returned my deductible with a printout of the court ruling.

2. Engine mod's or any mod's if not reported to his insurance company will violate his insurance. Wait for that...

3. Did driver receive a 'point to pass' at any time during his run? Could be used to show 'competitive environment' therefore possible exclusion in future appeal.

4. Court costs are not awarded in civil suits unless it can be shown that the case was an unwarranted or an unnecessary suit. Generally, if the suit is an interesting one or a good test of civil law that opened up a good legal argument, 'cost's are normally absorbed by both parties and not awarded to one side or the other. Criminal cases are a different matter; citizens are up against the weight of the State who have enormous resources at their disposal - hence court costs can (but not all the time) be awarded to people found innocent at criminal trials.

5. Most insurance agreements have been or will be modified to exclude ANY off road 'collision' coverage as a result of incidents like this. Failure to notify your insurance company that you do not accept the conditions of the renewal disclosure forms (in affect declining insurance) is deemed acceptance of those conditions.

6. There was a case a while back where coverage was declined to a passenger in a car wreak at a race track and through a complaint to the Superintendent of Motor Vehicle Insurance office - an order went out to the company to pay the claim of the passenger (therapy and dental claims) but the car was not covered. That decision never went to court as it went through the insurance arbitration system. Insurance companies benefit from this route because even if they lose - it cannot be used as case law in future suits.

7. Insurance companies always win in the end.

8. Do not drive at anything near 10/10's at Mosport in your street car unless you can afford to take the flatbed home - riding in the passenger seat with Robin driving. She tells me so many stories of grown men crying while she drives them and the wreak home on the 401 that it's like something out of that TV show Scared Straight! Sad but true.
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Old 09-05-2011, 11:13 AM
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