As agents and brokers we both love and hate this question. We love that people are asking probing questions. Do I need this type of coverage? Will it really benefit me? However, it’s also hard because we can’t say “yes or no” to the question, even if we think we know the answer. We are here to advise and guide. This blog post will be no different. So if you came here looking for a simple yes or no answer, you won’t find it. But what we are going to do is talk through some of the criteria we suggest you think about and some scenario’s where we recommend track day insurance.
So with that, let’s get to the question of how you would evaluate whether track day insurance makes sense for you and your situation. What are some of the considerations that swing the decision?
What Is Track Day Insurance
It’s a supplemental policy to cover certain on track activities. Your regular car insurance, even if it’s from an enthusiast friendly company like Hagerty, does not generally cover you while on track unless you have purchased an additional policy.
Track Day Insurance is designed to fill that gap by providing coverage for damage to your car in the event the unforeseen happens on track. Most policies will cover a collision event, whether with other vehicles or objects, though each policy will contain a specific list of what is and is not covered.
However, don’t take the term track day insurance to mean anything and everything is covered. In fact, there are a number of things track day insurance doesn’t cover traditionally, like damage to the track. Also, track day insurance isn’t for any type of on track event.
What Types Of Events Is Track Day Insurance Available For?
Track day insurance isn’t for all types of on track activities. In fact, different track day insurance carriers and policies have different rules. There are some general guidelines though that apply to most of the popular track day insurance policies.
Typically Covered
These events are typically covered, though be sure to review your specific policy related to your specific event.
- HPDEs (High Performance Driving Education) – most track day insurance policies are friendly to common HPDE events that happen on track. Note structure or instructed education is a requirement of some policies to qualify as HPDEs.
- Track Days – while some companies may restrict track days if there is no an educational component, many track day insurance policies cover any standard track day event.
May Be Covered, But Not Always
If the event you want to attend is one of these, we recommend asking your preferred track day insurance provider before purchasing to ensure they are covered.
- Private Membership Club Days – many automotive country clubs and race tracks offer membership or club driving days. These events are run like open track days. They are often covered by popular track day insurance providers, but check before buying as a few will not cover these because there is no educational component.
- Car Control Clinics – Car Control Clinics where you take your car and there is an educational component generally fall within the guidelines of an HPDE and are covered. But some track day insurance policies may not cover incidents that occur off track or at skid pads.
- Time Trials – SCCA, NASA, Grid Life and so many other tracks and organizations have events known as time trials. Any timed event is generally excluded, however, most track day insurance policies offer optional coverage for time trials. Do note that time trial coverage will not cover side by side racing events.
Generally Not Covered
The following are generally not covered by most track day insurance providers.
- Drifting Events – we’re hoping drifting coverage is available one day, but for now we are not aware of any popular track day insurance providers who will cover drifting.
- Wheel To Wheel Racing – once an event goes from a track day, or even a time trial, or a full side by side racing event it will be excluded and not a fit.
Things To Consider When Deciding Whether To Buy Track Day Insurance
Odds Of An Incident
The number one thing people think about when deciding whether to buy track day insurance is the odds of something happening. And this makes sense. If you even think about it, track day insurance companies are weighing the odds something that will happen and charging enough, or reducing enough risk, to try to make a profit. So it would stand to reason, the odds are better you won’t have a covered claim than you will.
However, there is a challenge with this line of thinking. The odds of an incident are governed by the law of larger numbers. Just like when you go to a casino, the odds of a particular number occurring on the roulette table is about 1 in 38 (with 0 and 00). Across enough spins, you’ll likely never come out ahead. The reality though is you don’t spin often enough for the odds to work out in your favor. What you are left with is wishing you had money on 00 when 00 comes up, even if its not more likely to occur than any other number.
Track day insurance is the same. Having it doesn’t change the odds you may have an incident, but you probably don’t go to the track enough where the law of large numbers applies, meaning you you can’t equalize out the risk. So you are likely left saying you were glad you didn’t buy track day insurance every time you don’t have an incident, but wishing you had it if you ever do.
Bottom line, the odds are not a factor we think should be the foundation of your decision.
Deductibles
Nearly every track day policy includes a deductible, which works just like the deductible on your regular car insurance. Track day deductibles are typically 10%, though there are options for higher, which lowers the premium. Some annual track day insurance policies we’ve even see go as low as 5%.
When buying track day insurance though, if you are buying it expecting it to cover a bent control arm or wheel, you will need to factor in the deductible. Depending on the value of the car, smaller claims may mean you are still shouldering a lot of, if not all of, the financial burden.
The reality is track day insurance is primarily there to cover substantial or significant damage, or a total loss. We recommend you think about it through that lens.
Consider What Isn’t Covered
While what is or isn’t covered is going to vary by the specific policy, there are a number of things that generally are not covered or may require a specific add-on or type of policy. This is just an brief list of common things that may not be covered.
Track Damage Or Damage To Other Cars
If you are concerned about the liability of damaging the track, or even that another driver may try to make a claim against you, track day insurance could be a good option, if you get optional liability insurance from a company like OpenTrack. However, it’s important to note that most track day insurance companies and providers do not include liability insurance, so if you are buying track day insurance primarily for this reason, make sure you get the right policy.
Mechanical Failure
Track day insurance generally only covers collisions, so any damage including fire that occurs because of a mechanical failure is generally not covered.
Medical Coverage
Most track day insurance policies do not include medical coverage for you, your passengers, or other drivers.
Driver Experience
Another significant factor in track day insurance is driver experience. Though this cuts both ways. If you talk to most track day operators they will tell the intermediate group has the most problems. They also tend to be the least likely to buy track day insurance. The reason is often the same. They know just enough to overvalue their capabilities. Of course, that’s a general statement, but its not without its foundation.
In the end, driver experience is a factor to consider both positively and negatively. If you are highly experienced and don’t push, you may find your odds of having an incident decline. Likewise, new drivers tend to be put in more controlled situations, and even are often cautious because they know they are inexperienced.
Intermediate drivers where they have few controls, but perhaps not the experience to avoid unexpected situations, or advanced drivers who are pushing to the limit might be good candidates for track day insurance.
In the end, deciding purely on your experience level may not be the best choice, but we do recommend considering strongly your experience level and style.
If You Car Has a Lien/Loan
One situation where we just outright recommend you have track day insurance is if you have a loan on your car. Your regular car insurance generally will not cover damage on track, and if you have a loan your really risking a lot by not having track day insurance. You literally could be stuck paying for a car you cannot drive in a worst case scenario.
Your Ability To Self Insure
Self-insurance is actually a very common practice. The thinking is at a certain point you spend so much money paying for insurance, that it’s just cheaper to pay for the damage or loss, particularly if the potential costs can be quantified. While there is a lot to that equation, and depending on the type of insurance there are even laws and limits on it what is required to self-insure. Still, it’s pretty normal.
Of course, track day insurance is usually optional, so you generally have the option to self-insure. When you go to the track without track day insurance you are effectively deciding to self insure, even if you don’t realize it. You are weighing the odds you’ll have to pay for damage against your ability to pay for that damage.
Seems obvious, but we recommend being a little more intentional and consider the following. If you are choosing to self insure, do you have the ability to actually execute on it? Having the available funds to fix the car, particularly if it’s your daily driver as well, is vital to the equation.
Bottom line, if you don’t have the ability to come out of pocket immediately to pay for repairs to your car, you should strongly consider track day insurance.
The Overall Value Of Your Car
The higher the value of the car, the more track day insurance makes sense. Sure, hundreds of dollars for a day where the odds may be you aren’t going to need it may feel like a waste. But when you realize a total loss of a Porsche GT4RS would be well into $100,000s of dollars, a few hundred dollars may be worth it.
The inverse is true as well. If you car is easily fixable or replaceable and only worth a small amount, track day insurance may not be worth it even if it’s only a couple of hundred dollars because its relatively inexpensive to cover the repairs yourself.
Cars That Are Expensive To Repair
There is a lot of overlap between cars that are high value and those that are expensive to repair, but the same situation applies. McLaren’s as a great example of a car where repair costs can be staggering, even compared to other exotics. Track day insurance is going to make more sense for those cars because even relatively minor incidents could come with substantial expenses. Of course, most track day insurance providers know this and likely will charge you a higher premium compared to other cars of equal value.
Like wise, with cars that are inexpensive to repair, even knowing the track day insurance policy is cheaper, it simply may not be worth buying insurance for.
The Track You Are Driving
Another factor to consider is the track you are driving. Familiarity with the track, like experience, cuts both ways. There are other considerations too, some tracks like Charlotte Motor Speedway for example, have substantially more walls and opportunities for single and multi-car collisions. At tracks like this, particularly when it intersects with other factors (high value car, expensive repairs, etc) we would recommend more strongly you consider track day insurance.
Conclusion
Our goal isn’t to talk you into or out of track day insurance. Rather, what we hope to do is provide some things to consider if you are on the fence, or even leaning one way or another.
Get A Track Day Insurance Quote
Interested in a quote for track day insurance? We can quote you across all of the popular track day insurance providers delivered to your inbox in just a few minutes. Have questions about track day insurance? Contact us and we’ll be glad to discuss your specific situation in more detail as well.
Shift Brokers Can Help You Navigate
Shift Brokers is insurance for car enthusiasts. We can help you understand the how different carriers will value your specialty car. In addition, we can help you select from insurance companies that will get you the kind of service and coverage you need. And because we are car enthusiasts and specialize in policies for car enthusiasts, we can help you navigate the unique needs and situations only car enthusiasts find themselves in. The best part is, because we are brokers, we represent you, not the insurance companies. There is never any obligation to work with us.
Informational Purposes Only
As with all of our blog posts with tips and suggestions about car insurance for enthusiasts, these are intended as general information. The specifics of your policy, state and carrier may differ. The information in this blog post is not intended to be formal insurance advice. However, if you’d like to talk to a licensed agent about your specific needs or questions, get a quote. Always read you policy carefully.
