Personal Umbrella Policies & Track Driving: Am I Covered On Or Off the Track?
A common question among track drivers is whether a Umbrella, often more formally known as a Personal Umbrella Policy (PUP) provides extra liability protection while participating in track events or owning a track car. In the article ahead we’ll touch on some questions to think about and ask if you are a avid track enthusiast – whether HPDEs all the way to grassroots motorsports.
Participating in a High-Performance Driver Education (HPDE) event, track day or even joining a growing list of time trials and wheel to wheel grassroots (amateur) racing series can be one of the most rewarding experiences for automotive enthusiasts. However, navigating the insurance landscape around motorsports, even grassroots, can be complicated. Worse, most traditional insurance agents are not well equipped to help you understand not just what the risk points are, but what are your options to address them. On top of that, many of the “motorsports” insurance companies are either transactional (track day insurance) or focused on large, professional racing organizations which may have very different needs than those in grassroots series or just attending weekend track days and HPDEs.
You may also be asking yourself right now “I don’t have assets to protect, why do I need an Umbrella policy? Also, if we all sign waivers, why would I be worried about liability on a during a track day or HPDE?” Those are all great and fair questions. In this blog post, in addition to touching on whether Umbrella policies work while on track, we’ll talk a little about why an Umbrella policy matters and why you may still be interested in having liability protection when engaging in an on track activity.
But if there is one thing we want you to take away from any insurance post: Everyone’s insurance situation is a lot more unique than they think, and this blog post isn’t intended to be insurance advice. Our goal here is simply to help arm you with some information to think about and questions to ask a licensed insurance professional about if you engage in these activities and have an Umbrella policy, or are considering one.
What Is A Umbrella And Why Would I Need One?
Let’s talk with what an “Umbrella” policy is and why you would want one for those who may not be familiar, or know the term but have not yet a chance to dive further into the topic. A Personal Umbrella Policy (PUP) is a type of supplemental liability insurance designed to protect individuals and asset owners against catastrophic, financially devastating legal claims. Standard liability coverage included in primary auto or homeowners policies typically comes with fixed payout limits—typically between $50,000 and $250,000, though you may see higher or lower limits depending on your policy, situation and state.
If an individual is found liable in a major accident or lawsuit where damages, medical bills, or legal judgments exceed those primary limits, personal assets such as home equity, savings, investments, and future wages can be targeted. An umbrella policy is intended to act as a secondary shield, kicking in once underlying policy limits are exhausted to provide excess liability protection (typically with $1 million or more in total protection). It is uniquely useful because it provides high-limit financial defense and peace of mind against potentially life-altering third-party liability claims at a relatively affordable annual premium.
We should also note that “Umbrella” is a general term, and there are a different Umbrella policies.. For example, a business may also have an Umbrella policy, so not all Umbrella policies are even personal. For the context of this article we are referring to a “Personal Umbrella Policy” when we generalize to “Umbrella”. Of course, if you have businesses, LLC ownership interests or other areas there could be additional exposure points for you that are well beyond the scope of this article.
Understanding How Personal Umbrella Policies Work
A Personal Umbrella Policy is designed to provide excess liability protection beyond the coverage limits of your primary personal policies (such as primary auto insurance or homeowners insurance) in the event of a significant claim.
Key features of a standard personal umbrella policy include:
- Excess Protection: It pays out after your underlying primary auto liability limits (e.g., $250,000/$500,000) are fully exhausted in a covered loss.
- Liability Only: Umbrella policies cover third-party bodily injury and third-party property damage claims against you. They do not cover physical damage to your own vehicle or personal property.
- Underlying Policy Dependence: Most umbrella policies are written either as “following form” (adopting all terms, definitions, and exclusions of the underlying auto policy) or as standalone policies with their own explicit exclusion clauses.
On-Track Coverage: Does an Umbrella Protect You During an HPDE or Track Day?
In almost all standard cases, a Personal Umbrella Policy will NOT cover you while driving on a racetrack. But why?
The Underlying Primary Exclusion
Primary personal auto policies almost universally contain explicit motorsports and racetrack exclusions . Typical wording excludes coverage for any vehicle operating inside a facility designed for racing or high-speed driving, or participating in any organized racing, speed contest, or driver education event. Most Umbrella policies also explicit limit what they cover to extending what is covered by the underlying policy. Which means if your insurance on the vehicle wouldn’t cover it, in most cases it’s likely your Umbrella won’t either.
“Following Form” vs. Standalone Umbrella Policies
- Following-Form Umbrella: If your primary auto insurance policy excludes HPDE or track events, a following-form umbrella policy automatically excludes them as well.
- Standalone Umbrella: Even if an umbrella policy is written on its own form, umbrella policies typically exclude track events, competitions for time or speed, organized racing, or driving on closed circuits. They also may still include language tying what they cover to the underlying policy as well.
Of course, these are just the “typical” types of Umbrella policies. Your individual Umbrella may be different.
Off-Track Coverage: Transport, Storage, and Public Road Driving
Off-track scenarios are more nuanced and depend heavily on whether the vehicle is street-legal, how it is registered, and how your specific Umbrella may address motorsports activities.
Would a PUP be applicable in any of these scenarios?
| Vehicle Type / Scenario | Public Road Driving | Transport & Trailering | Storage & Garage Liability |
|---|---|---|---|
| Street-Legal Track Car | A PUP typically would be applicable if the vehicle or the activity is not excluded and is properly insured under an underlying auto insurance policy with appropriate liability limits. | A PUP may be applicable if the tow vehicle and/or the vehicle being towed is properly insured under an underlying auto insurance policy with appropriate liability limits, However, it may vary depending on the state and the specific situation. | A PUP typically would be applicable if the vehicle is properly insured under an underlying auto insurance policy with appropriate liability limits . When storing at a home covered under a PUP that may also be applicable depending on the specific situation. |
| Non-Registered / Purpose-Built Race Car | Typically not applicable if not registered and not on a policy with liability insurance. Off track storage, trailer and paddock policies typically do not include any liability, but the tow vehicle may provided some protection. | A PUP may be applicable if the tow vehicle is properly insured under an underlying auto insurance policy with appropriate liability limits. However, it may vary depending on the state and the specific situation. | Off track storage, trailer and paddock policies typically do not include any liability, but depending on the situation your homeowners policy and PUP may provide some coverage. |
For each of these we highly recommend discussing the specific situation and scenario with a licensed insurance professional before making any asssumptions regarding coverage.
Street-Legal Vehicles Driven To/From the Track
If your car is registered, street-legal, and insured under a standard or enthusiast auto policy, your primary liability and umbrella policy generally apply while driving on public roads to and from the venue. However, just because you have insurance on your track car some insurance carriers may insert racing activity exclusion clauses that flag any vehicle known to attend track days. They could consider this an excluded use and attempt to limit or deny coverage, even on public roads, if a claim occurs during transit to or from a track event. Transparent communication with your insurance agent is crucial to ensure transit coverage remains intact, and if possible coverage is with a carrier which would not exclude some activities explicitly. And as mentioned above, in the event your primary insurance on the vehicle excludes a use or activity, that could be used by your Umbrella to exclude the activity as well, even if not on the racing surface.
Dedicated Non-Street Legal Or Operated Track Or Race Cars
Dedicated race cars or non-registered track builds that are not covered under standard personal auto policies typically will be automatically excluded from Umbrella policies. Because personal umbrella policies require underlying primary auto liability limits to be in force, a non-registered race car usually sits completely outside standard umbrella coverage off-track, since storage, trailer and paddock policies typically do not include any liability coverage. For this situation you may need a specialized commercial or motorsports endorsements in place.
Appropriate Liability Limits
While not exhaustive, it is VERY important to note that most Umbrella’s requirement a minimum underlying liability level to be enforce. We all too often see people split off their street driven track cars and place lower liability limits as a way to save funds. Keep in mind if you do this and those liability limits fall below the required levels, even if your other vehicles on your primary policy maintains sufficient levels, you could still have an issue. This is definitely an area not to make assumptions.
How to Properly Cover Track Cars and HPDE Participation
Because personal umbrella and auto policies leave significant gaps on the track, track enthusiasts must turn to specialized motorsports insurance products to protect their assets and minimize liability. While most are targeted at professional and semi-professional commercial race operations, there are options for individuals to obtain liability insurance while on track. However, the type of racing activity you are doing – HPDE, track day, time trial, grassroots wheel to wheel racing – can impact the options available, the price points and the potential risks.
One question we get asked all of the time is if we all sign the same wavier saying this is a dangerous activity and we take responsibility for ourselves, why do we need liability coverage at the track? It’s a fair question, and while the answer can be nuanced we’d like to think of it this way. Next time you are at the track, ask the track day or race organizer if they carry insurance. Ask the track management themselves. After all, if everyone signs the wavier, why would they carry insurance?
The answer unfortunately it’s fairly simple. While we’re not attorneys, what we’ve learned is that when there is money involved in a situation the chance someone would consider making a claim increases. And if you are left to pay out of pocket to defend yourself from that claim, you are further at risk. Insurance often doesn’t just guarantee any lost litigation or claims are potentially paid out, you get someone with a financial interest in defending you without the burden of all of the costs associated with it.
Track and organizers typically carry insurance for the same reason you may want to consider it. Signing the wavier doesn’t necessarily mean you won’t need to defend the wavier at some point.
Single-Event & Annual HPDE Physical Damage Policies
Specialty insurers offer dedicated track day insurance specifically for HPDE and time trial events. These policies cover physical damage (agreed value) to your vehicle while in the paddock and on the track, with customized deductibles. We should note that most of these policies do not provide any coverage for third party claims – which can include anything from track damage to injury against third parties.
On-Track Liability Insurance
Since standard track day policies typically focus strictly on physical damage to your car, there are track day and other specialized motorsports on track liability offerings available to cover potential third-party liability (such as track surface/barrier damage or third-party injuries) while operating on track.
Off-Track & Storage Insurance
For non-registered race cars or trailered track vehicles, off-track policies provide agreed-value physical damage protection while the car is in storage, in transit on a trailer, or parked in the paddock. However, they typically provide no direct liability coverage for third party claims. While during transit there may be some liability extended to the trailer from the tow vehicle, in the paddock or while loading or underloading typically there would be no implied liability coverage and Umbrella’s may not be applicable.
Other Forms Of Racing
While this article is fairly focused on HPDE, wheel to wheel racing and other road course centric grassroots motorsports activities, the exclusions and limitations we’ve discussed would generally apply to nearly any kind of racing or any activity at a racing facility. Autocross, drag racing, rallycross, Rally, Drift, dirt track, etc would likely be no different.
What options are available, and whether those offerings cover your specific activity can be the subject of nuance. It can get even more complicated with the advent of mixed HPDE and time trial run groups, trackcross (autocross on a road course) and other hybrid events that are not cleanly and clearly covered.
Recap
- Review Your Primary Auto Exclusions: Check for terms like “racing facility,” “high-speed driving,” or “education event.”. While not even remotely exhaustive, obvious exclusions like this are clear indications these activities are explicitly excluded.
- Check Your Umbrella Policy Form: Confirm if your umbrella is “following form” or contains standalone motorsports exclusions.
- Never Assume On-Track Liability: Standard PUPs almost never cover on-track incidents
- Secure Dedicated Track Coverage: Purchase dedicated HPDE track day insurance for physical damage and consult a specialized grassroots motorsports agency for on-track liability and off-track transport protection.
Informational Purposes Only
Every insurance blog post, including ours, always has a disclaimer. Always read your policy carefully. Despite this warning, so many people fail to do this. Just like Software License Agreements and Terms of Service, people tend to breeze through these legal contracts with little regard for what’s included. It’s pretty typical, but the risk of doing so is more than just the possibility of disappointment, it could cost you money. Lots of money.
Of course, we have to say it – what is or what is not covered is defined by your policy, not by what you read on the internet, heard in the paddock or were told by a friend who also has a track car. Our goal here isn’t to give you list of what is or isn’t covered with your Umbrella (or any other policy for that matter). Our goal is just to give you some things to think about as you consider participating in on track activities, regardless of the event type. We hope you’ll use these topics to ask questions and engage the help of licensed insurance professionals to get questions about your specific situation answered.
