There has been precident setting case law on this matter in Canada. Here it is:
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,
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,  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,  2 O.R. 274,  O.J. No. 758, 45 D.L.R. (2d) 216 (C.A.); [page430] McGuiness v. Canadian Gen-eral Insurance Co.,  B.C.J. No. 82, 66 D.L.R. (3d) 161,  I.L.R. Â1-740 at 106 (S.C.); Mildner v. Saskatchewan Government Insurance Office,  S.J. No. 85, 40 W.W.R. 86,  I.L.R. Â1-076 at 367 (Q.B.); R. v. Flannery,  O.J. No. 1885 (C.A.); R. v. Machado,  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.
 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 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.
 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.
 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.
 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.
 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.
 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.
 The applicant describes the driver education events as closely monitored programs in which participants learn to drive at higher speeds in controlled environments.
 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.
 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.
 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.
 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 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,  S.J. No. 85, 40 W.W.R. 86,  I.L.R. Â1-076 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.,  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.
 Blackstock v. Insurance Corp. of British Columbia,  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.
 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.
 A race is a test between rivals, according to R. v. Machado,  O.J. No. 387, 2010 ONSC 277; Gore Mutual Insurance Co. v. Rossignoli,  2 O.R. 274,  O.J. No. 758 (C.A.); and R. v. Flannery,  O.J. No. 1885 (C.A.).
 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.
 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.
 Counsel may make submissions as to costs within 30 days.
we discussed this yesterday at the track. Although it is a supreme court decision and can be referred to it doesn't mean that a refusal to insure can't be challenged by the companies on a case by case action involving their huge battery of lawyers in court. They would probably lose but do you really want to go through all that with your very expensive lawyer too?
Its not clear also if insurance companies may make specific policy exclusions to this although it says you can't be denied insurance on the matter or a claim. Probably why we still ask about it. Even though its set in stone (or in this case legal precident) is it really? I don't know of any case where anyone challenged the insurance company when denied after the fact and this case. No good answer here but maybe a good MCO member lawyer could offer opinions on this. I'd be interested in hearing what a legal beagle had to say. Interesting also that the insurance company involved so happens to be mine. When I got my insurance with them just a few years ago I was never even asked the question nor was there any form regarding it. Believe me, I check the fine print also.