Claim Horror Story: "I wasn't racing, I was just going really, really fast"
Most auto insurance policies specifically exclude any coverage for participating in an organized racing event. But what is often misunderstood is that many policies expand on this to also exclude the more common occurrence of sports-car-clubs meeting at a racetrack to enjoy taking their cars to the track as a hobby.
Case in point: An owner of a Porsche 911 met the rest of his Porsche Club at a local speedway. The members were allowed to take their street-legal Porsches onto the track and "open it up" on the course. No prizes, no organization, no timing, etc, just a group of car enthusiasts free to go as fast as they could.
Unfortunately, the Porsche 911 got too wide on a turn, clipped another car, and flipped it several times. The driver of the other car was ejected from his vehicle and was paralyzed from the waist down. The at-fault driver's claim for liability coverage and defense was denied and the entire settlement with the other driver was paid out of the at-fault driver's liquidated investment savings.
No two policies are the same and the specific language pertaining to this (and all) exclusions is a critical detail. Where some may find the wording of one company's exclusion to be vague, other insurance policies are extremely specific. In this case, the at-fault driver's policy was extremely specific as to exclude anything that had anything to do with driving, riding, or being at a racetrack for any reason.
The lesson: Know what your client enjoys doing as a hobby and make sure the insurance agent is made aware of it so there can either be a discussion concerning the known exclusions, or to try and find acceptable coverage (if available).
Mechelsen, Inc. Darren McGraw, MBA, CIC mechelseninc.com
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