Before You Ride That ATV, Check Your Local No-Fault Statute

Is it a good idea to drive a vehicle that is not street legal on a public road? Probably not. But if you’ve already done it, a recent Sixth Circuit decision suggests that might mean it’s covered by your auto insurance. In Leitch v. White, the Sixth Circuit Court of Appeals concluded that an auto insurance policy did not cover an off-road all-terrain vehicle wreck, in part because there was no record evidence that the vehicle was driven on a public street.

The case started when the plaintiff took a ride on an ATV owned by a man she met on vacation. The two got in a wreck, which left her seriously injured. She sought coverage under her auto insurance policy, but her insurer denied the claim. Under the insurer’s reading of the policy, the ATV was not an “auto” because it was not “operated or designed for use on public roads,” nor was it a motor vehicle within the meaning of Michigan’s no-fault insurance law, which incorporated substantially the same definition.

The district court ruled for the insurer, and the Sixth Circuit affirmed. The court first concluded that the policy’s definition of an “auto” and the no-fault law’s definition of a “motor vehicle” were materially the same — they both covered a motor vehicle either “designed for use on” or “operated” on a public road. Accordingly, the court concluded that it could rely on Michigan courts’ interpretations of the statute in interpreting both the statute and the policy.

On the former requirement, the court focused on the features of the specific model of vehicle at issue — which lacked turn signals, a horn, side mirrors, differential gears, and windshield wipers. Although the vehicle had headlights, taillights, and bumpers, the court held that these features were not enough to come within the definition of an “auto” because the lack of other safety features would make it difficult or impossible to drive the vehicle on a public road. The court also found relevant that the specific vehicle was outfitted with sand dune tires on the day of the wreck, making it even more impractical to drive on a road. The court further rejected the plaintiff’s argument that its test was too restrictive, noting that Michigan courts had consistently applied a “primary purpose” test in determining whether a vehicle was a “motor vehicle” under the no-fault law.

On the latter requirement, the court noted an ambiguity in Michigan law, explaining that it was unclear whether “operated on” meant that the vehicle was being used on a public road at the time of the accident, had ever been used on a public road, or was primarily used on public roads. Whichever standard applied, though, the court found that the plaintiff had failed to introduce any evidence that the vehicle had ever been used on a public road. Instead, all the evidence indicated that the owner had used it only in recreational settings and, when transporting it, had towed it in a trailer. Although the owner had registered the vehicle with his home state’s motor vehicle authority, the court concluded that this did not, by itself, constitute evidence of use on a public road. Thus, the court held that neither the policy nor the no-fault law applied to the vehicle, leaving the plaintiff without coverage.