HPDE Insurance "Valuation" Question

wildcatgoal

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What do ya'll put down for your vehicle's valuation when you get HPDE insurance? I have been putting $45,000 figuring that'd cover getting a NEW Mustang (should the car be totaled) and replace a few of my suspension parts. But reading the fine print on a competitor's page, it seems they'd only pay UP TO $45,000, but actually only what the KBB value of the vehicle was at the time (should it be deemed a total loss)... less the 10% deductible, of course.

That is not really acceptable to me. If the vehicle is a total loss, I don't want it's bloody resale value... :frusty:

Just trying to understand how others are perceiving this insurance.

 

EFI

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The 2 ones I looked at specifically said that the valuation you put initially does not include any aftermarket parts, those must be valued separately.

I imagine that if you pay the premium for 45k coverage, then that's what you get in case of a total loss...not the book value of the car which may be significantly less. It's like agreed value insurance for classic cars vs. regular auto insurance.

My car is relatively stock, and I got it for a good price compared to MSRP with 0% loan...so I pretty much put down somewhere in between what I owe and what I see as the market value of the car which are pretty close even during the first year of ownership due to the price I got.
 

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What do ya'll put down for your vehicle's valuation when you get HPDE insurance? I have been putting $45,000 figuring that'd cover getting a NEW Mustang (should the car be totaled) and replace a few of my suspension parts. But reading the fine print on a competitor's page, it seems they'd only pay UP TO $45,000, but actually only what the KBB value of the vehicle was at the time (should it be deemed a total loss)... less the 10% deductible, of course.

That is not really acceptable to me. If the vehicle is a total loss, I don't want it's bloody resale value... :frusty:

Just trying to understand how others are perceiving this insurance.
I put 60K I thought it was a agreed value policy..
 
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wildcatgoal

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They are "agreed value" but none of the three providers have come out and said to me - if I happen to total the car, I will be written a check for $45,000 - 10%.

I mean 10% requires me to keep 4,500 in a bank account just in case, so... sheesh.
 

ddozier

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What do ya'll put down for your vehicle's valuation when you get HPDE insurance? I have been putting $45,000 figuring that'd cover getting a NEW Mustang (should the car be totaled) and replace a few of my suspension parts. But reading the fine print on a competitor's page, it seems they'd only pay UP TO $45,000, but actually only what the KBB value of the vehicle was at the time (should it be deemed a total loss)... less the 10% deductible, of course.

That is not really acceptable to me. If the vehicle is a total loss, I don't want it's bloody resale value... :frusty:

Just trying to understand how others are perceiving this insurance.
Ask them to send you a copy of the actual policy before you purchase. I researched it a few years back and even called and talk to one of the agents from Lockton and all the questions I asked got very vague responses. I could have got the one guy that did not know anything but the policy i read was just as vague.

I wanted to know what the highest possible payout on a $50k agreed value policy was with a 10% deductible, seems like a simple question and should have been $45K, but the answer I got was depends on the value of the vehicle. I said I thought we agreed it was $50k on the policy. He said no it depends on the value of the vehicle before and after the incident. I said who determines that value, he said the underwriter does. Lockton is the underwriter so they determine the value of the vehicle.

I asked at what dollar of loss do they consider the car a total loss, again the answer was cryptic. I asked what happens if the car is a total loss and I want to keep and repair the car, the guy did not know but thought it would be possible for me to buy the car back. I said how would you determine the buyback price, again no real answer other than the underwriter would determine the sale price.

Another thing to be very careful of is the agreed value, you need to be aware of the percentage of dollar value they are using to determine the total loss. If it is 20% like most insurance carriers than on a $50k policy a car would be a total loss at a $40k repair bill, but they would take your car and payout $45k. I am not sure but if you wanted to keep the car I am sure the buy back price would be more than $10k, considering they know they can get at least that at an Insurance Auto Auction.

The big thing for me was I could never get them to give me the % number that they would consider a total loss, and the policy I have read say that the underwriter would determine the value of the vehicle after the wreck. So without those two things being known you can not determine if the insurance is worth it or not. If they use a 10%, 20% or 30% number for the total loss % each of those numbers has a huge impact on the payout to you, how soon they would take possession of the car, and how much it would cost you to buy it back if you wanted to keep it. Too many unknowns for me to value the insurance.

If you undervalue the policy to reduce your premium price then you could really loose as they would take the car even sooner if there was a major repair needed.

My situation may be a little more unique since my car is a dedicated track car with a lot of mods and a full weld in cage, harder to value for sure, but also much harder to replace. I am more likely to keep the car after an accident if there is even a chance it can be repaired where as others with more of a DD car would likely want a new car after an accident.

I decided not to purchase any insurance, I also had to be willing to write off the value of the car less any salvageable parts I could get off the car should a major incident happen. I figure as long as myself or someone else did not get hurt in the incident I could afford to rebuild the car even if that meant a total rebuild with a new chassis.

Keep in mind and this is likely the most important thing about any of these track insurance deals, this is property insurance only, there is no liability coverage what so ever. If you hit someone else and they are severely hurt or killed you can bet you will be sued by someone and have to defend yourself in court. That is were the big risk and huge payouts will be. For those of you that offer rides to your friends or others in the paddock you may want to get a waiver signed by anyone that rides in your car to relieve you from any liability. The track and organizer have everyone sign waivers to reduce their liability but no one is looking out for you. I stopped giving rides years ago to anyone other than family members for this very reason.

Dave
 


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wildcatgoal

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I'll give a ride if someone asks, but I'm going half nuts the whole time and they'll be made well aware of that. I should get me a pad of those waivers we sign going into tracks!

I have a call to the folks behind OnTrackInsurance happening today. They have been a lot more forthright vs. Lockton, which I've basically written off. Hagerty offers HPDE and Time Attack insurance now. I have a trust with them because they insured my old Lincoln and when I asked THEM what agreed value meant they said basically, "If your car is stolen or totaled, we write you a check for the agreed value."

As for others on track, unless there is proven malice or a violation of safety rules (which would not include spinning out and consequently being t-boned), I don't see how they can sue. Any good lawyer would quash that defining the risks of being on track as precedent and that all drivers agreed to it with already two waivers. Would be interesting to see how Harvey Spector handles it! :)
 

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I have a call to the folks behind OnTrackInsurance happening today. They have been a lot more forthright vs. Lockton, which I've basically written off. Hagerty offers HPDE and Time Attack insurance now. I have a trust with them because they insured my old Lincoln and when I asked THEM what agreed value meant they said basically, "If your car is stolen or totaled, we write you a check for the agreed value."

As for others on track, unless there is proven malice or a violation of safety rules (which would not include spinning out and consequently being t-boned), I don't see how they can sue. Any good lawyer would quash that defining the risks of being on track as precedent and that all drivers agreed to it with already two waivers. Would be interesting to see how Harvey Spector handles it! :)
Let us know what you hear from them.

Also, if someone is seriously injured or killed you can bet regardless of the waivers signed by you and the other drivers someone will be sued, and if your involved you will be named along with the track, the promoter, the corner worker, the tire maker, the guy who last serviced the car, and anyone else they can name. They are not always looking for a verdict and final judgement, sometimes they are hoping for a settlement from as many parties as possible. Either way just being named in a suit could cost you 10's of thousands of dollars if it ever goes to trial.

A good fiend of mine is a performance shop owner and they had to stop selling a type of paint that is used to tint your taillights because they sold a can to a customer. He used the paint himself on his car. Years later he got into an accident and the person that hit that guy said the tinted lens made it difficult for him to see the brake light and caused the accident. They sued my friend personally, his shop, DuPont, the distributor of the paint, the guy who owned the car, and a few other people. My friend had business insurance that decided to settle for a large sum of money as it was cheaper than defending the case in court. My friend still enjoys a higher premium for general liability because of the loss. He wanted to fight it but the insurance company gave him no choice. I never heard what DuPont did but I would not be surprised if they did not settle as well. Its a crazy world out there.

Dave
 
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wildcatgoal

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Fortunately, HPDE track days still seem to retain some of that non-litigious culture we used to have. Obviously there's that one guy and of course THAT GUY gets into an issue and sues, but... I believe the majority of folks understand the risks and so long as you weren't intentional, a gentlemen's agreement is all that's needed. Hopefully...
 

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I've used the Hagerty trackday insurance several times, and fortunately I have not had to deal with their claims process :)

But I've also used Hagerty classic car insurance in the past, and it's 100% agreed value regardless of what the car may be worth. I mean they do do a thorough review of the vehicle before issuing out the policy so you can't insure a crappy 20k classic for 100k, but still the fact that they do agreed value policy on their street cars makes me believe that the same goes for track day insurance since their wording is the same.

But as I mentioned before, I only insure my car for the current value of it and not a penny more (besides modifications). For starters I don't have to worry about the possible issue mentioned above where you pay for 45k policy but only get book value in return and also that makes it cheaper to buy...so every month as I make my payment to Ford Credit and my value drops I get to put down less value on the insurance.
 
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wildcatgoal

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I just heard from Hagerty and they said, and I quote:

"Thank you for your response. We would need to insure the vehicle for its value rather than what a brand new one would cost."

Therefore, the past times I've been getting HPDE insurance, I've been valuing at $45K basically. But had I totaled the car, I bet I would have only gotten $27K. I had been using OnTrackInsurance.com (not Hagerty). Have a call with OnTrack later.

While I understand their logic, if it is AGREED VALUE then they AGREE to pay me $45 if they underwrite the policy for that amount. Insurance is such a friggin' scam.
 

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Thank you, that's good to know.

Did you talk to them about modifications? I wonder if it works the same as the vehicle itself eg. current value vs. new replacement cost. Although I can't imagine they would be able to give you a "current market value" for a set of used coilovers, so my guess is they just use your receipts and pay you the amount it costs to replace the insured aftermarket parts.


I just heard from Hagerty and they said, and I quote:

"Thank you for your response. We would need to insure the vehicle for its value rather than what a brand new one would cost."

Therefore, the past times I've been getting HPDE insurance, I've been valuing at $45K basically. But had I totaled the car, I bet I would have only gotten $27K. I had been using OnTrackInsurance.com (not Hagerty). Have a call with OnTrack later.

While I understand their logic, if it is AGREED VALUE then they AGREE to pay me $45 if they underwrite the policy for that amount. Insurance is such a friggin' scam.
 

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I just heard from Hagerty and they said, and I quote:

"Thank you for your response. We would need to insure the vehicle for its value rather than what a brand new one would cost."

Therefore, the past times I've been getting HPDE insurance, I've been valuing at $45K basically. But had I totaled the car, I bet I would have only gotten $27K. I had been using OnTrackInsurance.com (not Hagerty). Have a call with OnTrack later.

While I understand their logic, if it is AGREED VALUE then they AGREE to pay me $45 if they underwrite the policy for that amount. Insurance is such a friggin' scam.
Right. They are happy to deduct 10% from your repair bill, but not pay 100% of the value that you thought you had mutually "agreed" on. :paddle:

Another approach to play this game is to choose the FMV of your car, add a fraction of your mods cost, and then hope that your (non-totaled) accident repair is within that value. That lowers your deductible a little, and covers you for the odds of a wreck costing you less than, say, $20k. But if your car is totaled, you will only get what it might cost you to replace it with another used car at FMV. Get it?

Example:
$40k when your car was new
$10k mods
$50k new value

$28k FMV of your car now
$ 5k depreciation of your mods
$33k amount to enter for track day insurance

$15k wreck repair bill
($3.3k) deductible
$11.7k your reimbursement

But if your car was truly totaled, then you would get $33k (not sure about deductible). You would have to try to salvage all the undamaged mod parts you could, which is a different battle. You replace your car with another equivalent one for $28k. And if you replaced all your mods again for $10k, then you would have lost another $5k for their depreciation.

I think the point is, that if they will not pay you more than FMV for your car, then there is no reason to insure it for more. It is good that they allow us to value our mods separately, because dealers won't during a trade-in.
 
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wildcatgoal

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The above is what I'll probably do going forward... almost to the dollar. Hagerty is nice because you list your mods SEPARATELY and thus they are valued that way, apparently. I value my car at $45K figuring its MSRP was $42K-ish + $3K in mods I'd probably not be able to easily rip off the car before it ends up at The Parts Farm being torn to pieces. Then 10% deductible actually makes it just over $40K which gets me $2K over a new equally equipped S550 with taxes/fees included and a modest mod budget. But I guess I can't use insurance that way, hah. Dang...

I sincerely would prefer if I could add a rider to my regular auto insurance. It's not like they can't find out that the car goes on track, but I get insurance for my track days because the car is not 100% paid off and that brings piece of mind (at least it did) to cover it in the paddock and on track. At least my previous insurance company said if I am participating in the event, I would not have any coverage except theft, even in the paddock. Like if my car started on fire or got hit by someone in the paddock, no pay.
 

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Example:
$40k when your car was new
$10k mods
$50k new value

$28k FMV of your car now
$ 5k depreciation of your mods
$33k amount to enter for track day insurance

$15k wreck repair bill
($3.3k) deductible
$11.7k your reimbursement

But if your car was truly totaled, then you would get $33k (not sure about deductible). You would have to try to salvage all the undamaged mod parts you could, which is a different battle. You replace your car with another equivalent one for $28k. And if you replaced all your mods again for $10k, then you would have lost another $5k for their depreciation.
My understanding is the deductible is in play on any loss, so for a total loss you would likely expect to get $29.7K using your numbers, $33k less 10%. But even that could be a battle because of how they value the car and the mods.

Your best bet is to ask them for a final payout using your numbers and your mods should there be a total loss. Ask them what happens to the car and what options you have to retain ownership after the loss. Then there is no guessing and you will know what to expect should the worse thing happen.

Dave
 
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wildcatgoal

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Personally I just have no interest in "retaining ownership" of my car if it was a total loss unless I got the payout AND got to keep the car, which isn't going to happen, haha.

Fundamentally, it seems like I should just fine the resale value (say $27K), insure it for that + listed mods and expect to pay 10% of the sum for a claim of any kind. So there will be no "new car replacement" so to speak or strategic avoidance of a deductible. Guess it's better than NOTHING.
 

 
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