Todd Serota [TracQuest]

In the now infamous Stunt Rd. thread, someone asked me a question about allowing students to time themselves at DE events. A discussion by some others ensued. Before I got a chance to answer, the thread was [thankfully!] closed. It's an important issue, and there are a lot of misconceptions, so I wanted to make sure I responded.

First, everyone needs to understand that the general rule of insurance is that something is covered unless it's excluded. Most auto insurance policies contain the same exclusionary language, essentially excluding "competition or racing or preparation for competition or racing." There is no specific reference to timing. Now, let's look at the different type of track events and see where they fit within the exclusionary language.

1) Wheel-to-wheel racing - clearly this isn't covered, as it's specifically excluded.

2) A time trial (at a race track) in which the insured is competing - this likewise shouldn't be covered, as competition is excluded. Note, however, that it's not timing per se that results in the exclusion. It's the fact that timing - by the event promoter - is the way the competition occurs. Also, I say "shouldn't" because some people have had claims at time trials covered by not volunteering information. They reported the claim and the insurance adjuster never asked the question that would have revealed that the event was timed.

3) An autocross in which the insured is competing - this likewise shouldn't be covered, for the same reason a time trial isn't covered. The exclusion we're discussing doesn't say anything about a race track, so the fact that autoxes are in parking lots shouldn't be relevant.

4) A DE event, as run by TracQuest, PCA, BMWCCA, etc. - There should be coverage at this type of event because it's a school. There's no racing or competition because the promoter of the event is not timing anyone, which would be necessary for there to be a competition. Now, just so everyone doesn't get the wrong idea, just because there should be coverage doesn't mean that an insurance company will see it that way. While the vast majority of DE claims have been paid without a problem, insurance companies are known to like to hold on to their money for as long as possible, or even abuse insureds who may not know their rights, so an insurance company might well refuse coverage for a DE and need to be beaten on by the insured's lawyer. In the end, though, I think the insured has the much better side of the argument.

I should point out that I'm aware of a fairly recent appellate case in Georgia where denial of coverage at a Panoz Racing School DE type event at Road Atlanta was upheld. However, like many cases, it turned on its facts. The insured admitted in his deposition that he was at the event to get ready for a competitive event the following weekend, and there were some other bad facts for the insured. Under those circumstances, I wasn't a bit surprised that the denial of coverage was upheld.

5) A mixed time trial/DE event where some people are participating in the DE portion and some are competing in the time trial - I think there is an excellent argument here that there is coverage for anyone participating in only the DE portion. The fact that there is also a time trial happening for other people doesn't change the fact that the insured isn't competing, racing or preparing for either, which are the activities that are excluded under the policy.

Now, let's talk about timing by the drivers themselves. Some PCA regions and other groups prohibit any timing by participants for fear that insurance coverage will be lost. I don't believe that will be the case, so I don't prohibit timing at TracQuest events. In fact, I even put out a Hot Lap transmitter for those who have Hot Lap systems and want to time themselves. I know some people are recoiling at this thought, but think about it. In addition to be a way to facilitate competition, timing is also an educational tool, enabling drivers to see how they're doing (more on that in a second). The fact that you're timing yourself has nothing to do with whether you're competing against anyone any more than does driving on the track at the same time and passing someone. It also doesn't mean you're preparing for competition. The issue is whether the event promoter is timing the participants, which I never do at TracQuest events. I've heard of this issue coming up in claims made by people (at events other than TracQuest events) and I'm not aware of coverage being denied because participants were timing themselves.

At this point I want to add a quick comment about timing. Unless you're extremely consistent with your lap times (within less than half a second of each other), timing isn't going to help you much if at all. People often use timing as a way to see if doing something differently is faster. However, if you're not extremely consistent, how would you know if a slightly lower lap time was due to the change or to a randomly lower lap. For instance, let's say your laps on a particular track are between 1:35 and 1:38. On one lap you run a 1:37.2. On the next lap you change your line through an important corner and run a 1:36.9. How do you know if the improvement was because of the change or because you simply ran a faster lap within your normal range?

Additionally, if you're a novice, timing can hurt you. You need to be focusing on learning the line, being smooth, etc. In order to do this you need to be going slowly. If you're timing yourself and trying for better lap times, you're pushing the car to your limit (even though that may be 10 seconds per lap below the car's limit) and you can't focus on learning; you're too worried about keeping the car on the track. Corner entry speed is particularly important. If you're going to fast or not in complete control when you enter a corner you can't place the car where you need to put it to be on the correct line. But I digress.

Here are a couple of final points about insurance. First, never lie to your insurance company. Aside from the fact that it's fraud, it could cost you your coverage. Not wanting to risk a denial of coverage, some people have had their cars towed onto public roadways so they could report that the accident happened there. I heard about one such case arising out of a PCA DE event several years ago where there would have been coverage if the incident had been reported accurately, but once it was discovered that the insured had committed fraud, coverage was out the window. However, not lying doesn't mean volunteering. Answer only questions asked, truthfully and accurately. I'm also aware of situations where the insurance adjuster just didn't ask the right questions and it never came out that the incident happened on a race track.

Second, what an insurance agent (State Farm, Farmers, etc.) tells you about your coverage is meaningless. Agents have been known to be real quick to give an off-the-cuff response when asked about coverage for DE events, telling insureds that they're not covered on a race track. Forget that. It's the policy language that governs, not what an agent says.

Third, don't ask your company in advance if you're covered at DE events. Some companies are getting more hostile toward their insureds who are tracking their cars so there's no reason to alert your insurer that you're doing this unless there's a need. Besides, the answer isn't going to help you anyway. If they say no, odds are they're wrong. If they say yes, they likely won't put it in writing, so you can't use the answer much to your advantage if there's a dispute later.

Finally, you should be aware that some policies contain different exclusionary language. Allstate, for example, excludes essentially anything that happens at a facility designed for racing. Under this language, there's very likely no coverage for any event at a race track even if it's just a straight DE with nary a stopwatch in sight. I think there may be a few other carriers that have adopted this or similar language, but I don't have any specifics. Bottom line: if you're not sure, check your policy.

PogueMoHone

Now, that's an informative post. Thanks Todd!

macfly

Now, that's an informative post. Thanks Todd!

Indeed, seconded, and it begs the question who do you insure with yourself Todd?

Todd Serota [TracQuest]

Thanks, guys. Let me preface my answer about who my insurance company is by saying that generally, I really dislike insurance companies because of how they treat their insureds. The one exception I've found is my auto insurer: Amica. They're one of the best companies with which I've ever done business, inside or outside of the insurance arena. They're very fair, actually care about customer service and stick to their word. Every time Amica comes up on a bulletin board or list serve the endorsements come in from everyone who's insured with them - their insureds love them! Their rates are also very reasonable in most situations, especially for Porsches. Two snaps and a circle - very highly recommended. If anyone wants to call for a quote, the number is 888-660-6422. Still, as nice as they are, don't mention track events.

forklift

Great post, I am getting ready to switch to State Farm from Allstate, but will call Amica first.

CodeRed

Are you covered under State Farm?

forklift

From what I understand from speaking to people at the track and doing a search on rennlist. I need to check for VA, but I don't want to ask an agent as they will probably say no, as stated above. When I have some time I will try and see if I can find an actual policy online. Apparently GEICO covered two totals at DEs last year at Summit Point, so I may call them as well.

Todd Serota [TracQuest]

After which Code Red inquired

"Are you covered under State Farm?"

and forklift responded:

"From what I understand from speaking to people at the track and doing a search on rennlist. I need to check for VA, but I don't want to ask an agent as they will probably say no, as stated above. When I have some time I will try and see if I can find an actual policy online. Apparently GEICO covered two totals at DEs last year at Summit Point, so I may call them as well."
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Greetings, gentlemen. Fwiw, here's my take on the three companies you've mentioned:

1) State Farm - Unless their policy language has changed recently, they have the "standard" exclusion I discussed in the first post. Not a bad company and they have covered DE's in the past, but I would think the only reason anyone would want to go with them over Amica would be because they were cheaper on a particular car or because the insured had other things insured with State Farm as well and was getting a good package deal.

2) Allstate - Avoid like the plague if you have any intention of ever tracking your car for the reason I stated above. An Allstate policy will not cover you when you're at the track.

3) Geico - Also avoid like the plague, not because they won't cover you if you're on the track, but because they're downright hostile toward their insureds and "our kind of people." Years ago, one of the questions on their survey was whether you had a radar detector. If you answered yes, either they wouldn't insure you or they would non-renew you if you were already insured with them. They financed one of the early radar guns for the police (might have been the Kustom Signals KR-11, but I'm not sure), which became known as the "Geico Gun." Also, many years ago I was insured with them and when they found out I went to traffic school, they non-renewed me because of it. I challenged them on it and they said it was the equivalent of pleading guilty, so they treated traffic school attendances of which they became aware like convictions. That is blatantly incorrect and I had to threaten them with a bad faith lawsuit in order to get them to keep me, after which I promptly moved to another company. Fyi, you don't want to be in a position where you've been canceled or non-renewed because you will have to list that fact on future applications and it's not a good thing.

Finally, I should mention another great company that I omitted in my first post because they serve a limited audience. That company is U.S.A.A. and they only insure people in the military, their family members and direct descendants. There may be one other class of people they'll insure, but it's alluding me at the moment. From what I've heard from U.S.A.A. insureds, they're like Amica - great company, very well liked by their insureds.

Ryan S.

Gezzz Todd, you like to write.

Todd Serota [TracQuest]

Hi Ryan:

It's that damn typing class I took in 7th grade. They created a monster!

macfly

Good info on Geico, I will never give them a cent of my money, sponsoring a radar gun. Scum!!!

forklift

Ok, geico is off my list, not really for the customer treatment, but for the radar.

Todd, just to be clear, if I am timing myself at a DE and not by the organizer, am I covered (IYO)? Obviously I would not volunteer that information.

Thanks.

Todd Serota [TracQuest]

Hi forklift:

Keep in mind that I'm giving you friendly advice and not a legal opinion, even though I'm a lawyer. Sorry, but lawyers need to issue such disclaimers, lest they wind up in a mess just for trying to be helpful to friends.

That said, I don't think your timing yourself should have any impact on your coverage. Remember that the exclusion is for competition and racing and preparation for those two things. I don't see how timing yourself fits you into any of those categories. I agree, however, that you shouldn't volunteer the information in the unlikely and unfortunate event that you have to deal with this situation. Otoh, if a claims adjuster asked you a question that required you to disclose the fact that you were timing yourself in order to answer truthfully, than you should disclose it.

AW

While most insurance companies will cover an incident at a DE, another point to consider is the negative impact on your records that such an incident would create.

Another option is to purchase an insurance specifically for track events in addition to your normal street insurance. I know at least one company providing coverage for non-timed event: http://www.americancollectorsins.com/

I have never had a claim with them but they are easy to deal with.

AW

forklift

Unfortunately, American Collectors does not offer insurance in VA. I went on the site and found the rate to be very reasonable (IMO), and would buy if possible.