(MARRS-RX7) FW: Car Insurance May Not Cover You at the Track

Scott Luttrell fastandwily
Wed Oct 22 15:32:01 CEST 2008


Disability insurance is another most have.

Scott

 

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From: spec7-bounces at specrx7.com [mailto:spec7-bounces at specrx7.com] On Behalf
Of Bill McCabe
Sent: Wednesday, October 22, 2008 9:00 AM
To: Spec RX-7
Subject: Re: (MARRS-RX7) FW: Car Insurance May Not Cover You at the Track

 

Guys, I agreed with the O.H.S.H.I.T. Insurance policy if you are that
concerned about wrecking it please don't bring it to the track because you
will at some point get your feelings hurt. Being that my past has been in
oval track we wrecked them every weekend and put them back together during
the week. It is going to happen. 

 

More importantly for those that are new to the sport or haven't ever thought
about it. You need to check you life insurance. Many specifically exclude
coverage to racing and motor sports. You can pay a little more and get this
covered.  Wrecking your car sucks but leaving your wife and kids with out
insurance would really suck. And no I don't sell insurance I just have a lot
of kids. 

On Tue, Oct 21, 2008 at 9:50 PM, Kevin & Eva Bailey
<kevin.s.bailey at verizon.net> wrote:

I am self ensured.  In other words, if I wad up my race car I am ensured to
be sitting out a season or so while my monthly budget is used to build a
replacement.....

 

Okay, quips aside.  My race car is covered by my home owners insurance in my
garage.  It is covered by my auto policy when in the trailer on public
roads.  Once the wheels are on race track turf though I am on my own.  As
far as my street cars go; on a track day I have USAA also.  My policy does
not cover "off-highway use".  I have not dug into the details, but I took
this to mean any 4-wheeling shenanigans, auto-crossing or track days were at
my own risk.  FWIW USAA is fully aware of me having a race car, they cover
it as a high-value item (while it sits still in the garage or is "cargo" in
the trailer and they seem quite happy to have me as a customer.  (while a
clean drivers record and no auto claims might earn me ridicule on this site,
USAA seems to appreciate it). 

 

AL- that was great info.  Thanks for passing it along.  I am going to look
into my options since we are doing some suspension work on my wife's Mustang
so she can start track-daying it and seeing if she wants to try wheel to
wheel.    

----- Original Message ----- 

From: AUGUST <mailto:amc.fab at hotmail.com>  MATULA 

To: Spec <mailto:spec7 at specrx7.com>  RX-7 

Sent: Tuesday, October 21, 2008 8:53 PM

Subject: Re: (MARRS-RX7) FW: Car Insurance May Not Cover You at the Track

 

what insurance are most running on thier cars

Danny Matula
AMC Fabricators, llc
ph# 540 295 7694 
Fax# 1-800-763-1731




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Date: Tue, 21 Oct 2008 12:13:16 -0400
From: AGervais at newcorp.com
To: spec7 at specrx7.com
Subject: (MARRS-RX7) FW: Car Insurance May Not Cover You at the Track

 

Interesting.  Not sure of the source of this story, it arrived as an
E-mail..  But apparently the old FATT party line of "You're insurance will
cover you because this is a driving school" may no longer be true.  -AG

 


Car Insurance May Not Cover You at the Track 


 

Shelby American Automobile Club

CHECK THE POLICY Some insurers no longer cover drivers who participate in
track events like these in Utah, above, and Virginia. 

By ROY FURCHGOTT

Published: October 17, 2008 

IT'S no secret that insurance companies don't like the people they cover to
drive fast. So it shouldn't be a surprise that the industry has been
removing a policy loophole that insured drivers on racetracks.
That has left weekend warriors uninsured if they participate in track days
or attend high-performance driving schools. Jerry Kunzman, executive
director of the National Auto Sport Association, said that participation at
its track events had jumped fivefold since 2003 and that many of those
drivers had no idea they were not covered..
"Maybe 25 or 30 percent have done the research, the middle third just
assumes they are covered, and the top third just don't have a clue," he
said.
What's happened is that many insurers have redefined the term "racing."
Policies have long had exclusions for racing, but it was defined as a "timed
event."
High-performance driver education neatly avoided that definition. Although
cars may take laps at top speed, they aren't timed.
At many schools, including those held by the Porsche Club of America and the
BMW
<http://topics.nytimes.com/top/news/business/companies/bayerische_motoren_we
rke_ag/index.html?inline=nyt-org>  Car Club of America, students are
required to attend classroom sessions. On the track, drivers get one-on-one
tutoring from an instructor under controlled conditions. The cars are
generally sent around the track in small groups with passing limited to
straightaways - and only when the driver being passed signals that doing so
is all right. So because these runs were not timed, many drivers were
covered by their normal automobile policies. 
That loophole did not escape the attention of insurers - some clubs
practically taunted them in their newsletters. "There was a period of time
when clubs were openly flouting this. 'Take driver's education and your
insurance will cover you. Drive your car the way it was meant to be
driven,'" said McKeel Hagerty, chief executive of the Hagerty Insurance
Agency, an automotive specialty insurer.
So the industry began to add a new exclusion to its policies in the late
1990s, with most companies adding it within the last few years. Instead of
trying to define racing, policies exclude damage at any location that could
accommodate racing, timed or not. That eliminated coverage during
high-performance driving schools and track days.
Chris Soignier of Austin, Tex., will not be taking his Porsche Cayman
<http://autos.nytimes.com/2008/Porsche/Cayman/277/10587/294720/researchOverv
iew.aspx?inline=nyt-classifier>  to the track, which he had done with his
previous cars. When he read his renewal notice from Progressive Insurance
last November, he found that the Cayman was not covered on the track.
"I don't feel like I'm that much at risk, but the magnitude of the loss is
too great for me to be comfortable," he said.
Not all drivers got word of the change, or, like Mr. Soignier, read their
new policy. Also, because insurance is regulated by the state, exemptions in
Michigan, for example, may differ from those in California.
To make matters worse, asking insurers to clarify coverage could result in a
nasty surprise. Mike Barr, a dentist from Palm Beach, Fla., called the
insurer USAA to see if his policy covered his Subaru WRX STi on the track.
"Some months later I got a letter from USAA saying they were going to
discontinue coverage," he said." "They dropped me because I asked about"
performance driving schools. "They confirmed it verbally when I called to
inquire further." A USAA spokesman said Dr. Barr was canceled for "several
reasons," but would not elaborate.
Some drivers reduce their exposure by getting an inexpensive track car. As
an insurance underwriter for Chubb insurance in Whitehouse Station, N.J.,
you'd think Eugene Lim would be averse to risk, and he is. But he is also a
driving aficionado who is qualified as a high-performance driving
instructor. After 40 track days in his Acura NSX
<http://autos.nytimes.com/2005/Acura/NSX/227/2555/268489/researchOverview.as
px?inline=nyt-classifier> , Mr. Lim discovered he was uninsured on the
track. So he bought what is essentially a disposable car. "When I got really
serious, I bought a turbo Miata. Six thousand dollars would still hurt, but
it's not my NSX," which was worth about $45,000.
Such a growing market would seem to be an opportunity - and it is. Specialty
insurers have tried offering high-performance-school insurance.
"It was a difficult program," said Laura Bergan, vice president for
marketing at American Collectors Insurance. "Difficult as in, we were paying
a lot of claims." American phased out its performance-school coverage last
year.
American, like other insurers who have tried the insurance, ran into a
series of hurdles. To attract a pool of clients and spread risk, the
policies were priced low - an average of $500 to $750 a year, Ms. Bergan
said. The number of claims wasn't a problem, but the cost of the claims was.
"Most of the claims were total losses," she said.
Other companies tried higher pricing, but found few takers.
Cost is not the only barrier. Many drivers don't think they'll crash, and
unlike regular car insurance, track insurance is not mandated by states.
Drivers often confuse track insurance provided by clubs, which in most cases
covers only liability and injury, with collision insurance.
The growing market still attracts new insurers. Laura Hauenstein, president
of the WSIB Insurance Agency of Jackson, Mich., which specializes in
motorsports coverage, was initially against offering performance-school
insurance. She changed her mind three years ago when WSIB found a way to
streamline the underwriting process.
"I would say we had 100, the first year or two, but this year we put ads in
Porsche Panorama," she said. "My numbers might be off - it could be 500."
The WSIB premium is 3 percent of the car's value. The deductible is $2,500,
or 4 percent of the car's value, whichever is greater. So an experienced
driver on an approved track with a $100,000 Porsche 911 Carrera
<http://autos.nytimes.com/2008/Porsche/911_Carrera/277/3227/295333/researchO
verview.aspx?inline=nyt-classifier>  S would pay $3,000 to cover 10 events
in one year, with a deductible of $4,000. Other companies, like K & K
Insurance Group of Fort Wayne, Ind., and Motorsports Insurance Services of
Los Angeles, have begun to offer the insurance, but use a more complex
formula to price it.
Gene Cottingham, former chief financial officer of Champ Car World Series,
which held open-wheel races, knows what track accidents can cost. So he
insured his modified 2006 Mustang GT pace car for $40,000. The $1,200
premium seemed high at first, but "when you spread that cost over five to
six weekends, it's really not that much money," he said.
"The purpose of insurance for me," he added, "is peace of mind."

 

 


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