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

Steven Wolfson stevewolfson
Wed Oct 22 18:32:43 CEST 2008

Good point Al (about net worth), but lets not forget, the guy who  
plucks down big bucks for that F355 can afford the policy for that  
track day. In 1985, we took a brand new RX7 GSL-SE (a $15,000 car) to  
"The Longest Day at Nelsons Ledges". One of the drivers insisted in  
insurance, a $3,300 weekend policy for racing with Lloyds of London.  
Said driver flipped and rolled, and the policy paid off. But, for  
$3300 today we could just buy another car. Point is, if the car is  
worth that much, there is a way to insure it for racing, all depends  
on how much your will to pay, or risk.

On Oct 22, 2008, at 11:52 AM, Gervais, Al wrote:

> Refer to Bill?s rule number 1, which I live by:
> >>Rule #1 for the race track:
> >>NEVER put any car on the track you are not willing to walk away  
> from.
> Now that being said, be aware your chances of having badness happen  
> are fairly low.  At most FATTS, there are no significantly damaged  
> cars.  But once in a while you see things like this:
> <image001.jpg>
> <image002.jpg>
> As for the Ferrari example, the funny thing is most of the folks  
> showing up with Red Italian Hardware probably have the same  
> percentage of their net worth tied up in those cars as we do in our  
> low-rent racers..  In other words, they can walk away from them if  
> needed.
> From: spec7-bounces at specrx7.com [mailto:spec7-bounces at specrx7.com]  
> On Behalf Of Alex C.
> Sent: Wednesday, October 22, 2008 11:18 AM
> To: 'Spec RX-7'
> Subject: Re: (MARRS-RX7) FW: Car Insurance May Not Cover You at the  
> Track
> 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 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 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, 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 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.?
> <image001.jpg><image002.jpg>
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