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Track Day/HPDE Insurance Strategy

SJulian10mm

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I am torn as to what to do when it comes to HPDE insurance. I feel it a necessity especially being that I still owe 18k on the car. I also have about 14k in mods. That said, the question is what direction should I go with the insurance?

Just take out an 18k policy to cover the remainder of the loan.
or
29-30k policy for current market value.
or
45k policy for current market + mods.

I have done option 3 for my last 2 events but it doubles the cost of the day and itemizing the mod list every time is already getting old (I’ve been using Lockton Motorsports for insurance).

They do have 6 event packages at a discount but still expensive.
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wildcatgoal

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If you actually speak to the provider, as I have, they will tell you that a demonstrable market value of the vehicle (absent modifications) is what the "agreed upon value" should be (or less corresponding to a clear reason, such as "this is what I owe on the car"). Then you need to add on (if you so choose) the receipted cost of your modifications (if any; excluding labor). You may add a line item for labor cost of installing said parts if you have legitimate receipts from their installation at an actual business but should not group labor cost in with the part's individual cost. There is a legal expectation you are truthful and clear and not gaming their product.

You might think, "it's agreed-upon value... if they agree to $500K on my $40K MSRP Mustang GT and I crash and total it at Road Atlanta while under that paid policy, they have to pay me $500K - the 10% deductible." I assure you they will not do so. Obviously that is an exaggeration, but I have chosen in the past to insure my car for $50K in total to account for the MSRP of a similarly-equipped new Mustang +the cost of my current modifications + a litlte wiggle room to game the 10% deductible. I did that before I spoke with the people behind OnTrackInsurance.com in detail and realized that I may not have seen $50K - 10% if the car was a total loss even if it was an agreed-upon value policy. All of these policies are effectively the same -- there is no "strategy" you should attempt. You should call them and work with them directly to value your insurance policy.

Specifically, the policy is designed so that the agreed-upon value is the private resale value of the vehicle (sans modifications) + listed aftermarket parts the owner wishes to insure... or less. Be aware, they can say they were mislead on the value of your vehicle if you egregiously or even slightly overstate that value or improperly tabulate it (according to a standard they claim a right to define). You really cannot use the vehicle MSRP but only a demonstrable private sale value (e.g., KBB or something similar) for the vehicle's maximum agreed upon value (unless you state clearly you are overvaluing the car because of XYZ reason and they agree to it). You can use full MSRP of your aftermarket parts since there is no legitimate database that articulates reliably their aftermarket value, which technically is technically $0 to the policy provider.

What many people do is take out a policy slightly above what they owe on the vehicle, which is an acceptable strategy -- but in doing so you save $50-100 on the cost of the policy and may only get paid out (more or less) the value of what you owe, leaving you with nothing.

Please also note, these policies are really "up to" the agreed upon value, not "you tap the wall and scratch your bumper so you get the full agreed upon value in a check in 7 days". So if you do crash, and you setup your policy sufficiently, it can be considered advantageous if the vehicle is actually totaled (i.e., irreprable frame damage per industry standards). That's how you get the maximum payout (consider it "replacement cost of a like vehicle"). If you just need a fender... they'll pay for the fender (less 10% deductible). Frankly the insurance is for catastrophes.
 
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SJulian10mm

SJulian10mm

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I think i'm leaning toward just going with current market value, which is nearly double what I owe anyway, and forget about itemizing the mods.
 

wildcatgoal

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Personally that's what I have been doing. If I total the Mustang, I most certainly would not get another one so I don't feel a desperate need to be reimbursed for the mods I've done. And frankly most of them would likely be salvageable.
 

NightmareMoon

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I totaled a heavily modded car a while back. Insurance would pay market value (which didnt account for any mods), or I could buy it back from them for ~1-2k less than market value, which gave me an entire car and all my mods to part out to recoup the missing 1-2k, which is what I did.

So I’d say consider insuring for market value minus the mods (since thats all they may pay out anyway), and expect to be parting the mods out yourself if you total it.
 

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NvrFinished

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In terms of insurance cost, I've found that Haggerty has lower rates for the same coverage. The insurance is actually through RLI and Haggerty just acts as a broker. The price is the same though whether you go through Haggerty or RLI directly.
 

Grintch

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Don't drive over your head.
Don't crash.
Skip the overpriced insurance.
(Never drive a car on track you can't afford to lose)
 

Hack

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Don't drive over your head.
Don't crash.
Skip the overpriced insurance.
(Never drive a car on track you can't afford to lose)
It's easy to say "don't crash", but there are a million things that can happen on track. Your car can malfunction or someone else's car can. Another driver can hit you.

Would you drive on the street without insurance?

Having said that - I have been on track without insurance. Yes I'm careful and it was at an event and venue I'm familiar with. Still - something could have happened.

The advice of driving a cheap (for you) car is good advice that I also don't follow.
 

shogun32

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What am I missing that your standard collision coverage wouldn't apply? It's not racing for money or otherwise. I guess I need to go reread my policy with a fine-toothed comb but I don't recall seeing anything about HPDE or non-timed events invalidating my coverage. Some tracks offer insurance for doing damage to the *track* and facilities but has nothing to do with the vehicle.
 

Grintch

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Most street car insurance is out the door as soon as you hit the track. Though some people have successfully made claims by not telling their insurance co that they were on track. This works better when you don't Tweet and Facebook about going to the track (yes, seen it happen).

You can buy race car insurance that covers you to and from the track, and in the paddock. It does not cover you on track.

HPDE insurance is rather new, and very overpriced in my opinion. But I am already used to racing with no insurance, so I have even less issues with safer track events without wheel to wheel racing. I have seen a couple of people who had it, and drove like jackasses because the insurance gave them a false sense of security. So I guess it's fair to say I have a bias against it. Want to reduce your risk? Don't drive over your head.
 

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drbrian722

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I've done what it would cost to replace the car (~$35k) through Haggerty and the rate has always been reasonable to me at $160 a weekend. I carry it because I don't know who I'm on track with and don't know where their head is at. Both in terms as a driver and their maintenance habits. I've seen a few mechanical failures cascade down to someone unsuspecting and the price is worth it to me.
 

JohnD

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Most street car insurance is out the door as soon as you hit the track. Though some people have successfully made claims by not telling their insurance co that they were on track. This works better when you don't Tweet and Facebook about going to the track (yes, seen it happen).
Wouldn't work were I live, the first thing the insurance company will try to get is a police report and there's not going to be one. And if you're foolish enough to report an accident to the police that didn't happen, or happened somewhere else like on a race track then you've now upgraded yourself into a criminal offence. Not bright.
 

SVO MkII

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What am I missing that your standard collision coverage wouldn't apply? It's not racing for money or otherwise. I guess I need to go reread my policy with a fine-toothed comb but I don't recall seeing anything about HPDE or non-timed events invalidating my coverage. Some tracks offer insurance for doing damage to the *track* and facilities but has nothing to do with the vehicle.
This has changed over the last 20 years or so. Today, most private passenger auto policies will not provide coverage if the vehicle is operated on a race track or any facility designed for racing, etc. It used to be the case that they would exclude coverage only if the vehicle was participating in a competition or timed/scored event. I totaled a 1989 Porsche at Road America back in 1998. My carrier was Allstate at that time. I told them exactly what I was doing and they paid the claim, no questions asked (and no, they didn't cancel me!). That would NOT happen today for the aforementioned reasons.
 

Flyhalf

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unfortunately it is not a Cheap hobby....and WE CANT CONTROL all the people on the track who can hit you or any mechanical failure. My philosophy? better 150$ more than 40k less . I use RLI and I find them very reasonable for what they offer.
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