When Does a "Pleasure Vehicle" Become a Company Car?
An Ontario court ruled a truck insured for pleasure was actually a commercial vehicle - with real consequences for insurer priority.
The decision, released on April 29, 2026, arose from a head-on collision on October 11, 2020, that left John Krolczyk seriously injured. Krolczyk was driving a 2004 Chevrolet Silverado owned by his elderly mother, Zofia Krolczyk, and insured by Gore Mutual Insurance Company as a "pleasure or commute vehicle." The broker had been told the truck was used for "pleasure or commute not more than 5 kms."
The reality was quite different.
Krolczyk was the director, vice-president, and general manager of Korel Farms Inc., a family farming corporation. He used the Silverado daily to travel between two farms roughly 15 to 20 kilometres apart - a crops farm in Baltimore and a cattle farm in Cobourg. The truck regularly hauled bales of hay between the two properties and was used to pick up parts and supplies. It carried commercial plates since 2017, and all fuel, maintenance, and repair expenses were claimed as business costs by Korel Farms Inc.
After the accident, Krolczyk applied for statutory accident benefits through Hamilton Township Mutual Insurance Company (HTM), which insured other vehicles tied to him and his wife, as well as a Ford F-250 owned by Korel Farms. HTM pushed back, launching an arbitration to determine which insurer held priority.
The dispute turned on section 3(7)(f)(i) of Ontario's Statutory Accident Benefits Schedule (O. Reg. 34/10), which deems a person the named insured under a vehicle's policy if that vehicle "is being made available for the individual's regular use by a corporation, unincorporated association, partnership, sole proprietorship or other entity." If that threshold was met, Gore Mutual - as the Silverado's insurer - would carry priority.
Arbitrator Kenneth Bialkowski found that it was. The truck's annual mileage, confirmed by VIN history, was "in stark contrast" to its declared pleasure use. He found that Zofia Krolczyk - 88 or 89 years old at the time, no longer licensed to drive, and later in a nursing home - had not made the truck available in a personal capacity. She had done so as a shareholder and director of Korel Farms. Krolczyk, the arbitrator noted, had "full control over who would use the Silverado and how the vehicle would be used."
The arbitrator also found the Krolczyk family operated as a "family unit" or "joint venture" - an "other entity" under the regulation - collectively running both farms after the death of Krolczyk's father.
In Gore Mutual Insurance Company v. Hamilton Township Mutual Insurance Company, 2026 ONSC 2550, Justice Des Rosiers of the Ontario Superior Court of Justice dismissed the appeal, finding no error in the arbitrator's reasoning and citing Kingsway General Insurance Co. v. Gore Mutual Insurance Co., 2012 ONCA 683. Gore Mutual was ordered to pay $6,500 in costs.
The message for insurers is clear: how a vehicle is classified on a policy is not the final word in a priority dispute. Where actual use, mileage records, tax filings, and the structure of a family business all point the same way, that is where the evidence leads - regardless of what was reported to the broker.
