ATV and off-road vehicle insurance explained: a beginner's guide

Off-road vehicles are a large part of life in the four states. Side-by-sides run the trails above Moab and through the Sand Hollow dunes in Utah, ATVs work ranches in Idaho and cover the Cinder Hills outside Flagstaff, and the washes and desert roads around Las Vegas and Phoenix carry more UTVs every year. Most of those machines are insured badly, if at all, because their owners assume one of the household policies covers them.

The assumption is wrong in a specific way. A personal auto policy covers vehicles designed for public roads and excludes those that are not. A homeowner policy covers a recreational vehicle's liability only while it is on the insured premises, which is to say in the yard, and covers it as property only up to a small sublimit. The moment the machine leaves the driveway on a trailer, it is uninsured unless it has its own policy. This guide explains what that policy contains.

Liability: the exposure is people, not the machine

An off-road policy's liability section pays what you owe when the vehicle injures someone or damages property, and pays for the defence. Trail collisions, a passenger thrown in a rollover, a child on a borrowed machine, a fence and a horse on private land, a hiker on a shared trail: these are the claims. Many forms cover a passenger's injury only if guest passenger liability is included, and some exclude injury to household members altogether, so a family with two kids on the back should ask about both.

Liability follows the machine for whoever operates it with permission, which is why lending a side-by-side to a friend for the afternoon is an insurance decision. If the friend hurts someone, your policy defends and pays first, and the claim goes on your record. If the machine is uninsured, the injured person sues you as the owner.

Physical damage, accessories and the trailer

Collision pays for damage from a rollover, a tree or another vehicle. Comprehensive pays for theft, fire, flood, vandalism and, in many forms, damage in transit on a trailer. Both are subject to a deductible and both pay actual cash value unless the policy is endorsed for agreed value, which some carriers offer for high-value UTVs. Theft is the dominant comprehensive claim; a side-by-side on an open trailer in a motel parking lot is a target, and a locked garage and a hitch lock are questions on the application.

Accessories are where owners are most often underinsured. A stock side-by-side leaves the dealer and immediately acquires a winch, a light bar, a roof, doors, a cage, a stereo, tyres and a lift. The policy covers accessories only to a built-in sublimit, and everything above it needs to be scheduled. Suppose a UTV cost $22,000 and carries $9,000 of add-ons, and the policy includes $2,000 for accessories. A total loss pays $22,000 plus $2,000 for the extras less the deductible; $7,000 of parts is lost unless it was declared. The trailer itself is covered only if listed with its own value, which is a separate line on the application.

Your own injuries

Medical payments coverage pays your own and your passengers' medical bills up to a modest limit regardless of fault, quickly and without a lawsuit. Uninsured and underinsured motorist coverage on an off-road policy responds when another rider without insurance injures you, which on a trail is the usual case, since most other machines are uninsured. Both are inexpensive relative to what a helicopter evacuation from a canyon costs, and health insurance remains the backstop with its deductible and network rules in place. Safety apparel coverage for helmets and protective gear damaged in a crash is offered by some carriers.

Registration, street-legal machines and where the rules differ

Each of the four states has its own off-highway vehicle registration or decal programme and its own rules on when an ATV or UTV may use a public road. The details are state matters and worth checking before a trip, but the insurance consequences follow a pattern.

• A machine used only off road, on trails and private land, is insured under an off-road policy and the state registration is a matter of access rather than insurance.
• A machine made street legal, which Arizona, Utah and Idaho allow under their own conditions and Nevada permits on some roads under local rules, is driven on public streets and needs liability coverage that satisfies the state's financial responsibility rules for a road vehicle. Some carriers write this as an endorsement; others require a different policy form. Tell the carrier if the machine is plated.
• Riding in another state is generally covered, but state land agencies and trail systems may require proof of liability coverage at the trailhead, and a printed card in the glovebox saves an argument.
• Riding on a road without the right plates or the right coverage is the situation where an insurer can deny a claim, and it is the situation most likely to involve a car.

What is commonly excluded

Racing, organised competition and timed events; commercial use, including rental and guided tours, which need a commercial policy; use by an operator below the age the policy names or without required safety certification; and, in most forms, use on a public road by a machine that is not street legal. Mechanical breakdown and wear are excluded, as is damage from overloading or from operating in water deep enough to hydrolock an engine. Intentional damage and damage while intoxicated are excluded, and an insurer may contest any loss where the machine was lent to someone outside the permissive-use definition.

What decides the premium

Engine size and machine type set the base; a sport UTV with a large turbocharged engine is rated well above a utility ATV. Value and the accessory schedule follow. Then the riders: ages, experience, safety course completion and driving records, since the carrier reads a motor vehicle report even for a machine that never sees a road. Then use: recreational, ranch and farm work, or a mix, and where the machine is stored. Then limits, deductibles and the endorsements chosen. Bundling with the household's auto and home policies is common and usually cheaper, and it keeps the machine visible to the umbrella carrier, which is the next point.

The umbrella and the ranch

A personal umbrella will extend over an off-road vehicle only if the vehicle is listed on it and its own policy carries the liability limit the umbrella requires. An unlisted side-by-side is the commonest hole in an otherwise sound umbrella. On a working farm or ranch, an ATV used for chores is often insured under the farm policy rather than a recreational policy, and the two treat passengers, hired hands and road use differently; a machine that does both jobs needs the farm carrier to know about the recreational use.

How to use this

List each machine with its accessories and their cost, note whether it is plated for road use, name everyone who rides it and their ages, and say whether it ever carries a passenger or does farm work. That list, together with the household's umbrella limit, sets the policy form, the accessory schedule, the liability limit and the passenger endorsement. We compare it across the carriers we represent in Arizona, Nevada, Utah and Idaho, and where the machine is already properly listed and limited, the answer is that no change is needed.