Insurance coverage and DE's

[Thrasher]

I'm told that some, but not all, insurance companies will cover your car during a sanctioned DE just as though you were on the street.

Hagerty is telling me that they don't cover this in my state (Missouri). I'm told that State Farm, though, does cover it.

Does anyone have a definitive answer on this?

The distinction is that we're not racing, but it's an "education" event.

[Jgordon]

Do a search on my name, I had a thread a while back. The upshot was that I had an allstate rep read the pca guide to driver's ed events and write me a letter stating that I was covered. I then went out and purchased de insurance as a precaution. Last thing I want to have happen in that situation is to have to litigate.

[DByers]

My policy from State Farm does not exclude participating in Drivers Education Courses. I have not had to test the limits on this yet but my father in-law who was high up in SF said to me not to tell the insurance agent what I was doing as they could change the language of the policy. He also said it would be a one time claim and after that it would be written out or I would be dropped. Another factor is I have had my insurance with SF for over 20 years with out one claim or points on my driving record so they have had no reason to look at my policy. I have never looked into track insurance but may do so in 06.

[Esel Mann]

Yep State Farm does cover so long as the track session is in no way racing. Non-racing examples would be, the infamous "drivers education" or open track. At first the insurance agent and underwriter were questionable about it. However I explained in detail that while the car would be on a track and the car would be driven at speed, the session was in no way a race because A) there is no concept of timing the laps, B) there is no concept of winner, placer, loser, C) there were no prizes, D) the session is controlled, for example no passing without the person overtaken giving permission/acknowledgement to pass. As a result they were ok with it. By the way the car mst be street legal and driven as opposed to trailered. The idea being that race cars are trailered. Not that I agree with their logic but hey it is what it is. I also made sure the policy notes state that coverage is provided even for DE and open track sessions.

As DByers points out, a claim made due to an incident while at the track will probably be the last claim made under those circumstances. Possibly resulting in dropped coverage at the most and redefined wording in the policy at the least.

Also, lke DByers, I have yet to make a claim with State Farm so I am not sure if they will hold to the policy (a stated value one at that!).

Time for FADC!

Regards,

Carlton

[MRM]

What has been said above is generally correct. The State Farm language discussed is the same from what I've seen. Remember that insurance policies vary from state to state, even though the master policy is written nation-wide for the company. You will have to check the language on your policy to be sure one way or the other. I wouldn't be comfortable relying on a State Farm policy without checking it myself.

As far as I know, no run of the mill "street" policy will cover accidents at races - that is, true speed contests like club races. Some policies will cover off-road high speed events like DEs as long as there is no racing. Others will not cover anything that happens off road. You have to read your policy to find out for sure.

The best way to make sure you're covered it is to buy specialized track-only coverage. I can't recommend it highly enough. Any one of a number of people here will chime in to tell you how to do it. Some tracks offer it, some local PCA clubs can set you up, and I've heard that you can buy it through the PCA, but I've never known anyone who did it that way. As a last resort just look in the yellow pages under "insurance broker" and call around until you find a broker who can set you up.

If you want to find out whether your regular policy covers DEs, and you don't want to depend on the good will or stupidity of your company, you HAVE to be honest with your agent and ask specifically about DEs, racing and AXs. If you ask your agent, are fully truthful in your description, and your agent gives you the ok, you are covered; they can't back out after an accident. Document the conversation with a letter to your agent and keep a copy.

If you ask the agent truthfully, and the agent tells you you are not covered, ask for the exclusion language and you can make your own judgment. But at least you know where you stand and you can buy relatively inexpensive track insurance. And then you're safe.

I've spent the better part of the last 15 years defending insurance companies (I have my own commercial litigation practice now, much happier) doing things like making denials for track accidents stick. I had a case almost exactly a year ago where an idiot (who was also a lawyer) smashed his Vette on an open lap day. He had a documented $90,000 plus into the car.

I took his examination under oath, determined that there was no coverage, and at my recommendation the company denied the claim. In my opinion he was not candid with his agent, so I felt no personal regret in denying coverage. It's not like he was driving a Porsche.

I think the case is still in litigation, I left that office soon after the case got served, so I don't know how it came out. At best he would have been able to get the $35,000 KBB value out of the claim. Still, a $60,000 hit is pretty hard to take.

The moral of the story, and why I went on so long, is that if you play games with insurance, you're taking a risk. If you don't want to take a risk of being not covered by insurance, buy a policy that covers you and don't look back.

[ChrisBennet]

Listen to MRM.

Even if you call the insurance company (not the agent, the company itself) and ask if they cover driving events and they say yes, it is no guarantee that they will cover it.

It doesn't matter if you are "clearly covered". In my case, the insurance company told me that the fact that I was in a certain run group "proved that I competed for that designation".

It doesn't matter if they covered an identical accident for you the year before. (The legal principle that applies is called "estople" I think.)BTDT.

It took a year and half and $3500+ in legal fees before my insurance company finally agreed to pay for my DE accident.
-Chris

[ecm911]

This has been talked /posted on allot.
varies by state , carrier and incident , car, etc.....

I can tell you I was covered with state farm in a 2001 incident at the Glen with state farm. Car was a street car, instructor in car .... real DE.

I was fully covered with only a bit of discussion about value...
Was not dropped , just lost me no accident discount.

That being said, a buddy of mine had n incident on the same day - was covered but was dropped. Not state farm, US????(can;t remember).

above are both PA residents.

Another club member a NJ resident was not covered for another incident at the Glen just a year or so ago.

[Wil Ferch]

State Farm ( in NYS ) flatly denied any form of coverage if I were to have an "episode" on a race track like the Glen..even if it was specifically called-out as a Driver's Ed event ..and not a timed event that can be construed as a "race" event...

...never get an "answer" form your agent..it might be wrong...have your agent get it in writing from the home-office underwriter..

Even better...get the answer in the form of a generic question...not directly linked to "your name" asking !!!

So..as you can see, there are too many opposite answers on this question even for the same policy holders in the same state...

-Wil

[MRM]

Will makes an excellent point. Agents work directly with underwriters and it is common for the agent to have the underwriter issue a written opinion that a certain risk is or isn't covered.

If the opinion comes back that you're covered, you save the cost of track insurance. If not, it's better to know now so you can calculate the cost of track insurance against the risk of an accident.

[DByers]

The other thing my father in law told me was that an insurance company is there to make money, plain and simple. They make money by providing a service (insurance) and they only make money if they are taking in more then they are spending (paying out). They will do what they must with in the law to limit the later. Your agent works for the insurance company (or themselves) not for you.

[hkspwrsche]

ask for a copy of your policy and find out from an underwriter before hand.. not your agent as they could misinterpret the coverage. the idea of getting coverage or an exclusion in writing before hand is the only way to be safe.
Your agent sells insurance but, does not determin coverage or settle claims for the most part. Policies vary by state. In Va they are written by the state and any endorsements or revisions need to be reviewed and approved by the state. In Va the "ISO" policy even goes so far as to say any facility designed for racing. That is one of several policy's your company can choose from in Va. Some companies will interpret that to mean a race track even during the course of a DE. Timed events such as an autocross are most definitely excluded so dont run into a pole in the lot.

[Flyer88]

How much does a DE policy usually cost?

[KNS]

How much do they cost and are they seperate from your own, regular policy?

[Mookster]

Read the exclusion pages of each of your individual auto policies carefully.

There are 2 parts of the policy...liability (injury and property damages to others)and physical damage (damage to your vehicle). Exclusions are noted in both sections.

Most policies exclude racing. DE is a gray area. As some have noted, the damages were paid but the insurer canceled later.

I have never seen a track insurance policy. I can comment that if there are 2 policies on the same vehicle this can lead to trouble...Which policy is primary, how it is paid....

Read before you sign. What if questions get what if answers. Most of the time the only way to confirm your coverage is to have a claim.

Don't assume, the same contract applies to you and the insurer.

[GaryR]

I use American Collectors DE Insurance which costs approx. $350 per year for around $25K covrage.... unfortuneately for you -

"The program is currently available in the following states:
California
Connecticut
Florida
Georgia
Illinois
Maryland
Michigan
Minnesota
North Carolina
Ohio
Pennsylvania
Washington
Wisconsin"

Website is http://www.americancollectorsins.com/index.php

[MRM]

Priority of coverage between multiple policies is not a problem. Specialty coverage like track insurance will be written to take priority over your general insurance.

Even so, the priority question is only an issue for the two companies to be concerned with. Your issue is to make sure that you have coverage from at least one company. If you get specialty coverage and the two companies disagree over who takes priority, they have to front you the money and argue between themselves over priority later.