In the quest for cheap car insurance, race car owners and drivers usually come out on the short end of the stick. Insurance companies are in the business of assessing risk and racing has risk written all over it. While the primary goal in any insurance situation for the customer is to find affordable premiums, in a high risk behavior like racing, you also want to make sure that you, your family, and your equipment are adequately protected. This is difficult in the face of multiple policies and overlapping benefits. As a "standard" rule of thumb, two types of basic coverage apply to racing situations, track held policies and driver/owner held policies.
Race sponsors and/or track managers take out policies that cover:
• Injuries to spectators.
• Damage to the track, viewing stands, and other associated buildings.
• Parking lot incidents.
• Some liability for employees other than drivers.
Whether these policies are maintained annually or are taken out per event depends entirely on the size and budget of the given venue.
Owners and drivers must address coverage gaps pertaining to both the vehicle and the driver (if the owner and driver are not the same person.) Multiple policies are generally needed for:
• Storage of the car, privately and at the track.
• Transportation of the car and associated equipment.
• Liability coverage for damage to others cars and injuries to other drivers.
• Medical policy for the driver.
• Potentially medical policies for team members.
Medical coverage will be over and above the given person’s individual health care coverage and intended to augment protection for high risk behavior. Drivers will have to evaluate the overlapping policies that apply to their sport and figure out what benefits are already in place on which they can draw and how those benefits should be strengthened to fit their individual circumstances. For instance, the National Hot Rod Association carries General Participant Accident and Liability coverage for members at national events that includes:
• $15,000 accidental death
• $20,000 accidental dismemberment
• $15,000 excess medical benefits (over any other insurance or self-insurance, federal, state, or other governmental plan or law)
• $400 a week disability payments for 52 weeks
Such benefits must be plugged into calculations of individual health care coverage. Private policies typically carry disclaimers about lowering benefit levels for high-risk behaviors. Drivers should anticipate the need to take out extra "high risk" coverage. Don’t assume basic track coverage will be sufficient.
Due to the large number of variables involved from one situation to the next, insurance companies take these insurance scenarios on on a case-by-case basis. In figuring out their individual need, drivers must consider not just the high cost of medical care, but also benefits to their families in the event of their death or those that will cover living expenses during an extended recovery period.
Above all, plan on working with an insurance professional you trust to walk you through the complexities of these unique coverage situations. Don’t neglect to look at benefits that may be available to you through memberships in given associations and at specific racing venues. Do not rule out additional coverage issued for single events in instances where track policies are insufficient. There is one hard and fast rule, more coverage is always best.