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

Bill McCabe thebillmccabe
Wed Oct 22 17:43:43 CEST 2008

Just call your insurance company. A FATT is not a timed event or a race some
companies will cover these events because they are not a race.

On Wed, Oct 22, 2008 at 11:18 AM, Alex C. <alexanderanson at gmail.com> wrote:

>  Just playing devils advocate here, but I had another thought about all of
> this as I was falling asleep last night.  What about this example:
> A guy goes out and buys a Ferrari F355, always wanted one and had the money
> to do it.  He's always wanted to push the limits of the car a bit, but knows
> that the safest environment to do that at is a track day or FATT.  He goes
> to the track and has a minor issue ? Lets say he bakes way to late into turn
> one, loses control (in a straight line) and takes the lower fascia off the
> car and spears the tire wall with just enough force that it looks like he
> did about a 15 mph collision with a car at a stop light.  Now, this guy did
> the right thing ? he didn't go out and risk his life and others by playing
> on the toll road at 315 in the morning one Saturday to test his car, and
> while his car is fixable, he still has to pay.  Its just Ironic to me,
> because that's what these cars are here for  - to go fast and to have fun
> (and with some of them, to look good while doing it).  If this wasn't to be
> the case, we would still be using Hitler's idea of the "peoples car" and all
> of us would be driving around in black VW bugs.  I guess what I'm saying is
> that people that go to the track to do it the right way shouldn't be
> punished.
> Now I'm seriously rethinking wanting to take my 350Z out to the track,
> although I have wanted to for some time.  Its not like I wanted to do it
> multiple times and beat the heck out of it, but I really would have loved to
> hear that thing whine down the front straight going into turn one while
> looking at the speedo to see how fast I was able to take it.
> - Alex
> -----Original Message-----
> *From:* spec7-bounces at specrx7.com [mailto:spec7-bounces at specrx7.com] *On
> Behalf Of *Mr. Ryan George McGovern
> *Sent:* Wednesday, October 22, 2008 8:54 AM
> *To:* Spec RX-7
> *Subject:* Re: (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.
> 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_werke_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/researchOverview.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.aspx?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/researchOverview.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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