Car Insurance at the Racetrack – Everything you ever wanted to know about Car Insurance and Track Days

There is a common mis-perception that your normal car insurance does not cover you in the event of an accident at a track day, which seems to be spread around the net by people who heard something from a friend of a friend who’s cousin’s buddy crashed his car at a track. I’m here to give you the actual information on insurance at the track from someone who’s been involved with organizing events for years, has seen people crash on the track, and has seen them get covered by their car insurance. Keep in mind that the vast majority of our experience is from California. Laws do vary from state-to-state, and may differ in your state. In any case, this is not 3rd-party bull, this is actual direct experience.


What your normal, street car insurance will NOT do for you

First of all, you’ve got to define track day. You have no hope of being covered by your car insurance if you’re racing. That means wheel-to-wheel, “rubbin is racing” racing. That DOES NOT mean any driving that occurs on a race track. Your auto insurance policy almost certainly contains a clause that says you are not covered under competition of any kind. This means competition for position on a track, and often also means competition against a clock. Any question you have about the latter merits a call to your insurance agent to ask about whether you’ll be covered, but it’s very unlikely you’d ever be covered if you’re being timed. Another imporant consideration is that you will not be covered if you were “practicing for racing”. From the point of view of your insurance company, “practicing for racing” is the same as actually racing, and it’s a sure way to lose coverage.

There was a famous case a few years ago where a Viper driver was taking a course to qualify for his racing license (aka a Racing School), totalled his car, and was denied coverage because he was “practicing for racing”. The story got around and people came to the erroneous conclusion that you are not covered if you crash a track. The issue, however, was that the driver was going for his racing license, and therefore violated the “practicing for racing” prohibition.



What your normal, street car insurance CAN do for you

Events that take place at race tracks which include instruction and in which you are not being timed are typically considered “driver’s education” events. For this type of event, most car insurance policies WILL cover you in the event of an accident. If you do have an accident, the insurance adjuster will contact the organizer of the track event and ask a series of questions to determine whether you were competing, or whether you were participating as a student to improve your driving. Several things will influence whether you are covered or not, such as the following:

1) Does your insurance policy explicitly refuse coverage for anything occuring on a race track? It may sound obvious, but you’ve got to check. There’s a new trend among some insurance companies where they’re explicitly refusing to cover anything that happens on a “course designed for competition”, which they typically inform you of in the paperwork you get when it’s time to renew. You’ve got to read this stuff to make sure it’s not there. So far, we’ve been told (and verified) that Allstate has added the exclusionary language to their policies. We’re told by an informed source that Nationwide has just changed their policy as well. We have heard that State Farm may have as well, at least in some states, but have conflicting information that State Farm is still covering driver’s education events in WA and CA. AAAGeicoProgressivePemco have recently covered accidents on the track, so they would be good places to look if you need a new policy. There may be others, and we simply haven’t heard about it yet.

2) Were you being timed? The answer had better be “No”.

3) Did you have an instructor in the car? The answer here doesn’t have to be “Yes”, but it would make your life considerably easier if the answer was “Yes”.

4) Does the event organizer describe the event as a “RACE”, or use the term in their name? Use of the word “RACE” can make things very difficult. The insurance company is NOT going to buy it when you say “oh, they just call it that, but it’s not a race”.

5) And as unfortunate as this question is, how modified is your car? It may not be fair, but the more “race-car like” your car is, the more trouble you’re likely to have. If you have a full roll-cage in your car, you’ve got a serious problem. If you’ve got full-slicks on the car (meaning non DOT tires), you’ve got a problem. If you’ve just got the typical stuff, say DOT-R tires and a roll bar (not a full cage), and perhaps suspension changes, you’re probably ok. A harness and race seats will also raise eyebrows, but won’t get you excluded on their own.

Ultimately, if you want to know if you’ll be covered, you must read your policy. If your capacity for boredom isn’t great enough to read the whole thing, your other choice is to call your agent. This is really a distant second, though, as agents often find this stuff just as boring as you do, and they haven’t even read them. It’s not uncommon for people to get incorrect answers about coverage from their agent, so we STRONGLY recommend you both talk to the agent and read it yourself.

While the information above is true and accurate to the best of our knowledge, it can not be construed to cover every possible situation, and we can not guarantee your agency’s policies will necessarily be reflected in the above.


Questions and Answers

I hadn’t anticipated this, but as people discover this page they’re starting to ask questions about things I haven’t covered. I will add those here or edit the page to include material as questions come in.

Question – What if the driver was not the insured owner? Would things be any different?

Answer – The more important question might be “What will my friend do to me if I crash his car?” 🙂 However, my answer is that if the driver would be insured on the street driving another person’s car, then it should make no difference, but keep in mind I’m just guessing now. The reality is it’s a very bad idea to crash your friend’s car, and I highly discourage you from doing so. I haven’t seen this situation come up, so all I can do is apply a little logic and hope it’s right.

8 Responses to “Car Insurance at the Racetrack – Everything you ever wanted to know about Car Insurance and Track Days”

  1. Ian Cutrona says:

    i just checked with my AAA agent and they will NOT cover if doing anything of that sort. so lame. instructional or not. no coverage. California

  2. Marty Ellison says:

    Perfect!! After reading this I approached my insurance agent and you are spot on!!! December 4 road Atlanta it will be on!! Thanks so much for your accurate information!! Marty

  3. Larry says:

    Nationwide in NC has a new clause (01-2013) excluding any coverage occurring at a race facility if you are on track

  4. Shawn says:

    What if i was racing the 1/8 mile track and the other racer loses control and wrecks into me? I dont think its fair that im out 10 grand because his insurer wont pay. Would you have a good case in court against his insurer?

    • John says:

      You’ve got to remember that when your insurance pays for an accident, it’s because they’ve contracted to insulate you from claims – meaning they’re basically representing you, and as your representative, they’re setting the claim on your behalf. In the scenario you’re talking about, the insurance policy (a contract) specifically says “We aren’t covering you on a track,” so your only recourse would be to go after the driver himself. However, you signed a waiver when you entered the track, saying you will hold the track, the organizers, and the other drivers harmless, meaning you agree not to sue them. So, the first thing you would have to do was show some reason the judge should throw the waiver out. You would have to show something like gross negligence on the part of the driver to do this, and that’s not easy to do. Him losing control isn’t gross negligence, and odds are you wouldn’t prevail. Add to that that in order to find out you’d have to hire an attorney and sue, and you’re potentially just making the situation worse – you could spend $10k on an attorney fees and recover nothing, doubling your loss to $20k.

      The short answer is the rules of racing are spelled out in the waiver you signed – you’re not supposed to sue. You need to think about that before going on track. It’s a tough situation.

      On the bright side, there IS race even insurance which will cover your car on track, but it’s very expensive, as you’d imagine. If I remember correctly it costs about 10% of the value of the car.

  5. Ryan Cooper says:

    And I thought Progressive Insurance sold markers for full coverage on Totaled racecars. ProStreet lied!

    • John says:

      I’m a little confused by your comment. There is coverage available specifically for race cars – as I mentioned at the end of my response to Shawn, but it’s very expensive, so few people buy it. The topic this post dealt with was regular street-car insurance, and when will it cover you on a race track – which is getting increasingly rare, these days.

      I should probably point out that speciality race car insurance covers only your car, not other people’s cars. The standard model holds where drivers generally can’t look to fellow drivers for insurance coverage, but if you do buy race car insurance it will cover your own car in case of an accident.

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