Insurance Companies Dropping Race Track Coverage

Posted: October 21, 2008

For many years, auto enthusiasts have been able to take their cars to race tracks for "track days" and high-performance driving schools, and rely on their ordinary car insurance to cover any accidents that occur on the track.  Those days, apparently, are over.

The New York Times reports, "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 driving schools and laps on race tracks without any competition present "neatly avoided that definition."  But "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."

Track events have been a growing pastime in recent years.  "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."  The events typically include many safety resources.  "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."  But insurance companies no longer cover the events.

Some of the schools even advertised that traditional car insurance covered the events.  McKeel Hagerty, chief executive of the Hagerty Insurance Agency, an automotive specialty insurer, told the Times, "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."

Jalopnik notes that specialty insurance for enthusiasts is available.  "To help, some small specialty insurers like WSIB, K&K and Motorsports Insurance Services are stepping in to offer specific club event and track day insurance. It's not cheap, but then again nothing is in racing."

Autoblog points out, however, that you might want to avoid calling your current agency to ask if you're covered.  When one weekend racer in the Times piece "asked his insurance company if his Subaru WRX STI was covered during a track event, his policy was dropped six months later."

If you're interested in track day, you may need to look at an affordable sporty ride, and set aside the savings for the insurance.  Research the best affordable sports cars with U.S. News' car rankings and reviews.

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