Gentlemen, start your engines and check your insurance
A standard auto or home policy won't cover any type of racing
damage or liability. Common forms of amateur motorsports such as
drag racing, autocross, rallies and track days are excluded from
regular auto insurance policies.
There's probably fine print in the exclusions portion of
that looks something like this:
"Liability arising from the sponsoring or taking part in any
organized or agreed-upon racing or speed contest or demonstration
in which your insured car has active participation, or in practice
or preparation for any such contest."
The sanctioning body for the type of racing you do may carry
liability insurance. However, it will usually be bare bones
coverage meant to protect those you injure. Most organizations
aren't in the business of protecting drivers and repairing their
So, what's an amateur racecar driver to do?
Would you push your car off a cliff?
Your daily-driven car becomes uninsured the minute you "race"
it. The question is, what's racing?
As a general rule of thumb, if you are being timed, you're
racing. If it's a contest, you're racing. Many policies simply
exclude any damage that occurs at "a location designed for
competition," which means even events such as high-performance
driving schools might not be covered.
is also expressly prohibited in virtually all auto policies, though
it's harder to prove (and a really nasty moving violation in most
"If you're going to race, you have to be prepared for the
consequences," says Penny Gusner, CarInsurance.com consumer
analyst. "From a risk standpoint, you more or less are pushing your
car over a cliff."
And maybe yourself as well. Any personal injury protection or
medical payments coverage you have on the street may not apply on
the track, Gusner says; without it, you'd need to rely on your own
health insurance coverage, assuming that you have it.
Lastly, it's very likely that racing
voids your manufacturer's warranty
, if your car is new.
Track coverage at a price
Specialty insurance companies will write policies for amateur
drivers at sanctioned events.
A $30,000 track-day policy at
(including coverage for damaged guardrails and wreckage removal)
costs about $200. Other carriers to investigate include Lockton
Motorsports and OnTrackInsurance.com. Policies are typically
"agreed value" -- that is, you and the insurance company agree what
your car is worth up front, and you pay a premium based on that
amount. They typically cover only damage to the car, not any
injuries the driver suffers or damage he may inflict on others.
While $200 for track-day coverage may sound steep, policies for
specialized racecars can cost much more. Ryan Ondrejko Motorsports
"[We have an] on-track policy that covers damage done to the car
while I am racing and the other is an off-track policy that covers
any issues that might arise while the car is not on the track. We
are currently insured for up to $150,000. It costs us between
$4,000 to $5,000 a year to have both packages available for our
car," says Ondrejko, two-time National Hot Rod Association
Northeast Top Sportsman Champion.
"In a sport where you are accelerating from 0 to 200 mph in a
matter of six seconds, so much can go wrong," Ondrejko says. "I
wouldn't drive a racecar that was not insured."
Big-time racing means big-time coverage
A Sports Car Club of America racer competing in eight or 10
races will pay a much different rate than a drag racer competing
twice a year or a Porsche owner tackling a single track day.
At this level, the type of cars, their speed and horsepower, and
even the racetracks themselves are taken into account. Most racers
have a policy for their vehicles, an off-track policy to cover
their cars while in storage and general liability.
Yet many opt out of health insurance policies.
"While this is common, it is in no way acceptable, and someone
interested in getting involved with racing should make sure they
are financially able to do so," says Tom Doran, CEO and longtime
motorsport helmet expert at The Helmet Man.
"As a racer, you're going to have to expect premium insurance
prices," Doran says. "Most car insurance carriers refuse to cover
such a high level of risk, but there are some race-friendly
carriers, like Hot Rod, Heacock, or Naughton that can help, for a
premium, of course."
Interestingly, amateurs who participate in professional events
can void a policy and any injuries resulting from racing.
"A client is rated based on the type of motorsport, class and
medical history," says Adam Bates, vice president of Insurance
Services of America, which offers niche insurance including health
coverage for amateur and professional racers. "I usually recommend
an AD&D [accidental death & dismemberment] policy, as most
life policies exclude racing."
What's more, Laura Hauenstein, president of WSIB Motorsports
Insurance, which insures racers, says some of the agents familiar
with motorsports will use the Internet to research the driver. If
they find they have a history of crashing, rates can be higher.