Can I Be Dropped For Driving My Car On A Race Track?
Could your insurance company “drop” you for driving your street car on trck?
In this blog post we’re going to dive into this topic a little bit. There is a lot of nuance in this situation. We’ll cover topics such as unpermitted use vs. uncovered activity.
Here is a quick spoiler alert. The short answer to this entire blog post – yes, in most states you can be non-renewed or even canceled for driving your insured street car on track. And just going once could be enough. But why, will they and what you do about it is actually a lot more nuanced than it appears on the surface.
Our goal here isn’t to fear monger, but lay out the realities for those of us who enjoy taking our cars to the track. Can and will are not the same thing. And “will they” is a much different question then can they. Whether they want to may even vary depending on how well your insurance company is doing in any particular point in time.
The Term “Dropped”
Before we dive into the main topic at hand, let’s briefly touch on the term “dropped”. Dropped is not an official insurance term. It’s slang that has developed over the years. It’s really the way to describe what happens when you insurance company decides they no want to do business with you anymore.
It generally comes in two forms, either being canceled (mid-term, while your policy is active) or non-renewed (at the expiration of your existing policy, electing not to offer you a new policy).
Your Risk Profile
Let’s talk about WHY activities like driving on the track could get your insurance policy canceled. As we’ve talked about a lot in blog posts, insurance companies are allowed to develop a risk profile for you. They base your premium on what they determine your risk level is.
While there are a number of laws and limits on what can be used to develop a risk profile, generally speaking its often a combination of: overall vehicle model claims history, value/cost, credit score, insurance score, driving history, usage and so much more. This is why commuting and miles generally impact your premium. The more miles you drive, the more risk. The more you drive, or the longer you commute, the more risk.
Driving at the track can be considered more risky in a number of ways. First, it’s high performance driving and they can claim that may lead to less safe driving on the street. The faster the car is driven regularly, the higher the risk. Also, you may be more apt to file a claim. Another common reason we’ve heard cited is it adds wear and damage to the car overall, making an actual claim or resale value lower. All of these could be considered a change to your risk profile in which the insurance company is not willing to accept.
Uncovered Activity Vs. Non-Permitted Use
Another place we want to provide some clarity on is the idea of uncovered activity vs. non-permitted use. Insurance companies may allow you to do something, but consider it uncovered. Other times, policies may explicitly not allow you to do something. Racing, driving on track, off roading and many other activities can be considered either uncovered activity or non-permitted uses.
Uncovered Activity – not explicitly disallowed but coverage is not extended in the event of a loss.
Non-Permitted Use – an activity that is not allowed, and would generally trigger a cancel/non-renew scenario. Generally speaking, non-permitted uses will also not be covered in the event of a loss.
It’s important to note that while your insurance company may list explicit uncovered, or even non-permitted uses, in most states they are not required to publish an exhaustive list.
If, when you purchased your policy you signed anything indicating certain uses, even those that might occur during regular ownership of the vehicle are non-permitted, your insurance company would be within their right to non-renew you.
We’ll talk about this further below, but keep in mind even if you are with an insurance carrier or have a policy where driving on track isn’t considered a non-permitted use, doesn’t mean it’s a covered activity.
Can I Be Dropped For Driving My Car On A Race Track?
As we mentioned at the beginning, the short answer is yes. Either by declaring it a change in risk profile or a non-permitted use, your insurance company can, in most instances, choose not to continue to insure you if you drive on track.
Will they? That may depend on how well the insurance company is doing. Right now it’s a bad time for insurers, so they are actively looking for reasons to get unwanted business off of the books. It’s possible that if you declare you race or drive on track, or you have a claim at or near a racing facility that your insurance company will actively seek to non-renew you.
We’ve also heard reports of insurance companies telling insureds that they would try to deny claims if they occurred at race tracks, even if they weren’t driven on track. One client told us their nationally recognized military service insurer told them they would deny a claim and potentially drop them if their tow vehicle was involved in a claim while on the grounds of a race track. We are not attorneys, and we haven’t read that specific insurance contract out there so we’re not sure if that would be something your particular carrier could or would do. It does, however, go to show how insurance companies perceive the risk of even entering a racing facility, much less know you participate in one.
How To Avoid Getting Dropped For Tracking My Car
The easiest answer is to get your car insured with a company that considers tracking or racing a permissible use. There are several enthusiast insurance companies that will openly allow you to track or race your vehicle. However, keep in mind in just about every instance your on street insurance policy, even from a track or racing friendly company like Hagerty, will still treat driving on track as an uncovered activity. So while you won’t run the risk of being “dropped”, that doesn’t mean you will be covered.
How To Get Covered On Track
If you want to be covered on track, you’ll need a track day insurance policy. Track day insurance policies generally cover collision damage during an HPDE or track day. Some can also cover open track events and even limited timed competitions like time trials.
Additionally, there are a few companies that will offer liability coverage for on track activities as well. Keep in mind, most track insurance policies don’t include liability coverage. In fact, there are quite a few things your regular on street policy likely includes that track day insurance would not cover.
For true competitions, such as side by side racing, there are a few specialty policies available that will cover you for liability or collision (or both).
Conclusion
Bottom line – yes, in most states your insurance company could attempt to declare your risk profile has changed, and taking your car on track can be considered a change in risk profile. Even if you take your car on track just once your insurance could be non-renewed. While it’s unlikely, in most cases, they use this information to attempt to justify a a mid-policy cancelation, it would be very easy for them to drop you at your upcoming renewal.
Even some enthusiast or collector companies will drop you for taking your car on track. Others will disallow “racing”, which may mean HPDE usage is ok, but any evidence of drag racing, time trials or other racing could easily cause an issue. And of course, the term racing can be subjective. If your car has significant performance or safety modifications, even if you only participate in HPDEs, your insurance company may feel they can deem your car a “racing vehicle” even if it’s not tied to timing or a competition.
The best way to be sure you are not putting your insurance at risk is to get insurance from a company that allows track or racing usage as a permitted use.
For Information Purposes Only
The information in this blog post is intended as general information and not direct insurance advice. The goal is to give you information to think and ask a licensed agent about. This information should not be the sole source of information when making an insurance decision. Every situation is unique, products and coverages may vary by state, company and situation.
