Fooshe

Ron,

You are one of the few who could find their policy, let alone read it. Let me try to help as I have been in the insurance industry for just short of 20 years. I have worked from claims to underwriting....I am now an agent in Southern California.

First and foremost, everyone needs to learn one basic truth...insurance policies are specific from State to State. Generally speaking, no one policy is universal. Legally speaking, each State has to approve the policy to be used by an admitted carrier (one that is bound by that State's Department of Insurance guidelines and audits.)

You are correct to assume that based on that wording, a DE should be covered, but sometimes they are not. Please remember that I say this not knowing if there is any further wording or verbiage that continues. However, remember that the wording is specific, so don't read into it or make more of it than it is. You also need to be prepared for the fact that there could be another answer.

I also would say to those who are speaking in general, you are probably right about your State, but could be way off on another. Furthermore, I would seriously try to refrain from giving opinion as fact as it is seriously misleading. I speak with and hear from some very intelligent people who make statements that they really shouldn't. They really should ask the question and not make blanket statements. I know they may be trying to help, but that is how rumors start and become tall tales even though they start from very good intentions.

One suggestion I have for everyone is not to guess about your coverage. First and foremost, call your agent and ask a simple, hypothetical question. Nobody is going to cancel you and nobody is going to put you on a "list," as I have heard before. Simply ask a question without really giving them more information than you need to. Just simply say "Hi Mr./Ms. Agent, I have a question on how my policy would react to a specific usage. I am unfamiliar with any conditions or exclusions that would apply. Can you help me?" If they stutter or don't seem to know the answer, heads up. If they don't and they tell you so ("I don't know the answer to that, but let me find out the correct answer and get back to you"), that is the sign of a good agent. You may be written by a captive agent (State Farm, Allstate, Farmers, for example). If that is the case, they should perform just like an independent agent (Mercury, Firemans Fund, Hartford, Progressive, Metlife, etc.)

Now if you are with a direct writer (AAA, Geico, USAA, for example), ask to speak with a policy service person or the claims dept. They know the policy verbiage best as it is what they use to do their job every day. They should be able to go through the policy, most importantly the exclusions sections, and read to you exactly what your policy says and how the policy typically reacts. If they read it and try to provide their own interpretation, caution! They don't get me make that kind of final determination. If you find you get into a debate with them, the wording could leave room for interpretation and that may work to your favor.

Some don't want to ID themselves or let their Agent/Carrier know you are involved in this kind of activity...that's fine. Just call and tell them that you had a friend go to one of these events and had a collision and you were wondering what would happen if you did one and had to use your policy. Then present to them the hypothetical facts and see where things go. No matter who you speak with, Agent of Carrier, have them send you the exclusion section that would pertain to this situation. If they can't, or won't, ask them to cite you the exact section and sub-section they are quoting and the exact exclusion letter they are reading. Then ask for a policy specimen that governs your specific policy. They are required to provide you with one when requested from a valid policy holder.

Last, but not least, don't skimp on coverage or run blind. Know what you are covered for and is not included. If you don't know ask. Don't be afraid to ask questions...good agents like it when you are informed. Slacker agents get nervous because they have to work. Don't think they will drop you just for asking questions or for wanting to understand your policy. They can't just cancel you for reasons like that...In fact, there are only specific reasons they can drop your coverage and I have never seen "being informed" as one of them.

If in any doubt after speaking with your Agent, get a new one. If in doubt after speaking with your carrier, switch insurance companies. If you like your company and don't want to switch, work with the on track insurers out there for coverage. I have spoken with Ryan at Lockton read the policy jacket. I think it is a good program. I am not affiliated with him and can't sell it so I am trying to be unbiased on that. In fact, I wish he would let me sell and market the damn thing!!! WSIB is also a reputable place to go with, too. There are even more, but you get the picture.

Should ANYONE have an insurance question, need help with an insurance situation or you just want to know something about the industry, whatever I know is yours for the asking....no fluff and no double talk, just the straight poop. I insure a few Rennlisters and have tried to serve them well. Oh, and if I don't know, I will tell you so and try to help find the answer. My specialty and license are in California, but the basic premise of insurance applies in all States.

TRAKCAR

Thanks!

Here is the text that counts in my policy:
It might be OK. After all we are not involved in organized racing or speed contests. Right?

"Any vehicle, located inside a facility designed for racing, for the purpose of:
a. Competing in; or
b. Practicing or preparing for;
any prearranged or organized racing or speed contest."

Let me know what you think.

Fooshe

Ok, let's break this down:

Any vehicle = That means yours, your buddies or a rental car. So far, simple.

located inside a facility designed for racing = Ok, so this one could be tricky. Yes, a race track is a no brainer. How about a parking lot set up for an autocross. It is not designed for racing...not until you put up a bunch of cones and put a timing beacon at the start and finish lines. Now, it is a temporary course constructed for a contest for speed. The logic is that you must go faster to get a better time. Increasing the speed of which you can get through the course. Remember, speed does not just refer to the car itself. **Note: it says "Any vehicle, located inside a facility designed..." So one could question Is a public highway was designed for racing? I would say no...so what about the Silver State Classic? That is clearly a contest for speed but it is not "located inside a facility designed for racing." I would then argue that should the event you are in be held on a public roadway that has no barriers, you might be covered. It's thin, but it's an arguement based on the literal interpretation.

"for the purposes of" = So you have to be there for a reason and the reasons are listed below. This keeps from excluding things like a fender bender while going to see a race. Someone else suggested this earlier....see how rumors start?

"a. Competing in; or b. Practicing or preparing for; any prearranged or organized racing or speed contest." = So if you are competing, preparing to compete or perparing to compete in a contest for speed that is prearranged is pretty clear. However the word "racing" is used. Clearly they are not talking about the nineteenth studio album by the Japanese band Loudness (serious...you can look that up!) They mean that an event where you are competing to get to a certain place before all others. You may not be going fast to get there, but the goal/act of getting there before others now constitutes competition.


So when you put all that together, they seem to be saying this:
Any vehicle at a facility that is either purpose built or set up temporarily and the reason the vehicle is there is to prepare and/or practice to compete, or to actually compete, at an event that took time to arrange/plan for ahead of time that involves a contest for speed; which (for example) could measured by actual MPH, shortest amount of time or order in which the participants reach the established goal, afterwhich a means of recognition is granted, would not be covered. Soooooooooo, if you are at a track and driving around it for the sheer thrill of doing so without timing, anyone telling you that you must go faster and there is no award for doing so, it would appear that there would be coverage as long as you are not preparing or practicing for, nor actually involved in, any arranged contest for speed or racing at all.

Now I am not an attorney and I am not trying to give you legal advice. So don't go out to a track event, get in a crash and blame me if your company does not cover you. I am merely talking out loud so you can understand how I am reading and interepreting what has been presented.

rlips

Fooshe,

thanks so much for your thoughts, that helps a lot. Actually, the wording reads EXACLTY like that if TRACKCAR, word for word. I actually read through the ENTIRE policy, and other than that phrase, I saw no other language remotely related. The exact language was used in the exclusion section of both the liability and damage sections of the policy.

That said, I will call my carrier and ask. My guess? The language doesn't exclude this sort of usuage, but the policy is probably not priced with the risk in mind. In otherwords, I think it is a loophole. My guess is if people started having DE type claims they would tighten the language. Again, only my guess, i WILL call to confirm .

inverterman

It is good to live in a desert. Coastal or not So Cal is a desert. A lot of the tracks around here have only the pit wall to hit. Seriously though, any of us driving our cars the way they were designed to be driven should insure. Anything can happen. Fooshe and I have friends who have had students take them out at a HPDE event. So although you are 9 tenth most of the time someone may be looking for 11 tenths and take you out.

TeamDrugMoney

Hello gottagofast, I actually have one more question and it refers to Carrera GTs thoughts above. What coverage is on the policy you offer for medical?

Thank you

Fooshe

No problem...I hope it helps. By the way, I applaude you for braving the pages of your policy jacket. Gald to see you made it back to the real world without a blowing a blood vessel or two.

The wording that you have in your policy is very similar to some other policies for a reason. The verbiage had to be introduced and the Department of Insurance had already approved someone else's so they won't turn down the carrier's request when they submit it for change. It's a quick fix, but usually not the right fix.

Truth be told, I share your thoughts in that I feel this is a loophole that some carriers have not figured out yet. Mostly because they have not seen a claims trend that exposes it. Now, with more and more DE's going on, there is sure to be an increase in claims. That means someone will see this and the carriers will make further changes. Once that happens, someone in the industry or a trade magazine will write an article about it and it will become an issue for some carriers. A few national carriers already have experienced this and addressed it. So you really are spot on with what you said.

The take away from this is READ THE EXCLUSIONS SECTION OF THE POLICY AND ASK QUESTIONS WHEN YOU DON'T UNDERSTAND SOMETHING. Be careful not to just ask if something is covered because you are putting yourself at the mercy of the person who answers the question. If they say it is covered, ask them where the policy states it and then go verify what you are being told. Ask to see where in the policy is shows that it is excluded if they tell you there is no coverage for something. Of course you are always welcome to run things by me if you need help, too. Again, I will do the best that I can to answer your question(s).

Fooshe

Inverterman is 100% correct. You may have coverage by your policy, but what about someone else? What if they hit you? If they don't, do they have the funds to cover your damages? You really need to take responsibility for your own protection as this is your investment and some people think they are immune from liability when they are on a race track......which is not entirely true.

And yes, we have seen people taken out by students before. One, in particular, was completely innocent when the collision took place and the guy had the funds to take care of it....he just didn't. The worst part is that the instructor he hit is not only a nice guy, but he did not have the money needed to completely replace what he had. Lesson learned.

gottagofast13

Currently we are only offering first party physical damage insurance - just covering your car. We are looking into developing solutions to provide 1st party medical and 3rd party bodily injury/physical damage.

gottagofast13

Fooshe's analysis and advice shown above is great. Unfortunately, I've heard of multiple cases where this type of exclusion has been used to deny a DE/HPDE claim.

Before I started Club Racing, I would tell my friends about DEs and stress that they are not competitive and clearly point out that it's not racing. Then I would see my friends later and they would ask about how my "racing" season was going. Most people consider cars driving around a racetrack at a quick pace racing.

Since "racing" is not defined in the policy it is left to interpretation. Unfortunately for us, we take the chance that a judge is going to react like most of my non-DE friends would react.

Fooshe

Thanks Ryan. And by the way, props to you for putting out a good product that the track goers here should be taking advantage of. My hope is that you will consider allowing a select few agents in key areas market and sell the policy for you, too. It has clear benefits for the right person and really is something I would like to make available.

Anyway, What Ryan wrote is something the real "racing" community laughs at. People at an HPDE, and those who know they are going to a race track, calling what they do racing. Now, those of us who have been around the block know it's not really "racing," but others don't always have that perception. So why leave it in the hands of 12 people who you don't know and may not be able to relate to what "racing" is.

The only advantage I see is that, as Ryan pointed out, the policy does not define racing. That means there is some opportunity for interpretation of what "racing" is. That being said, the term "racing" could be found to be too vague or ambiguous. If so, the court usually sides with the signer of the contract and not the writer of it since the writer should have been more clear. Nevertheless, why go through the hastle and why leave things to chance? Insure yourself in a way that leaves no doubt...just my feelings on it.

inverterman

There is some HP between the ears here and what has been said in this thread makes a lot of sense. So much sense that Insurers can use the written text here to improve their underwriting policies. Rather teach prying eyes maybe we should all agree that HPDE insurance is a good thing?

Forums are driving revolutions in today's world. Are we naive to think that forums could not drive policies?

gottagofast13

More good points from "Fooshe". We are considering opening our program to outside agents, but as it stands now, we only offer our coverage through our website.

Outside of someone who just has a "timed or competition event" exclusion in their policy, the majority of exclusions that I have read either absolutely exclude DEs or include language that appears to limit coverage at racetracks. I think we can all agree that actuaries aren't accounting for DE exposure when they are coming up with their rates. The question you need to ask yourself is, are you willing to risk the chance that your policy will deny an on-track incident? For some, that is a risk they are willing to take - I don't think most of us are willing to take that chance.

Izzone

anothe rupgrade you might consider is a policy that covers HPDE and regular on the street coverage.....if you bundle the two cash flow buckets it may make the overall cost less

amfp

May sound odd, but think USAA DE coverage can vary by state. I checked when lived in CT/NY and it was no. I am a long time loyal customer for all my properties and cars with no claims. Personally, I prefer keeping track insurance separate from my personal policies. YMMV.