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Insurance for drivers schools question

22 November 2001
I'm curious what you guys are experiencing with insurance coverage for drivers schools. My policy changed to include this exception:

Loss to your covered auto or any non-owned auto while the car is being used for:
a. competing in; or
b. practicing or preparing for

any organized racing, speed, demolition, stunt or performance contest or related activity whether or not for pay.

Looks like no big deal but Liberty Mutual is telling me I'm no longer covered for a drivers school. I'm guessing I just spoke with someone who doesn't know what they're talking about but am curious what others are running into.
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It doesn't say anything about participating in a "Driver's School."
Most policies, if not all by now, have exclusions for driving on tracks for any reason. The carriers have "caught on" to HPDE and have written in the exclusionary language. The language in your policy seems "incomplete" since the other policies I have reviewed contain additional terms.

The "problem" with your policy language is that it contains the vague "and related activity". Usually, vague language is interpreted in favor of the insured but given the trend I would be surprised if they would actually cover HPDE any longer.
It bothers me that I have yet to get an answer based on an actual reading of the policy. After 1 1/2 weeks all I get is "underwriting says its not covered". I'd like to talk with someone in their legal or underwriting department that can explain the intent of whoever wrote this language. You could read "related activity" to mean just about anything. If they intended to exclude a DE event they could have been much more specific.

Does anyone know of a national company that has good language in their policy?
Ask them to define in writing what "and related activity" refers to - note it is singular and not plural. I would have asked this before raising the red flag though.
Most policies, if not all by now, have exclusions for driving on tracks for any reason. The carriers have "caught on" to HPDE and have written in the exclusionary language. The language in your policy seems "incomplete" since the other policies I have reviewed contain additional terms.
Yes, many policies now exclude coverage for any activity on a road surface used for competition events, or wording to that effect.

If you continue to pursue this discussion with their underwriting department, I wouldn't be surprised if it led their company to change the wording of their policies to explicitly specify that exclusion, rather than the current wording which doesn't explicitly and precisely do so.
So do you get the sense that most or many people are now driving in DE's uninsured? Real world what are people doing? I can't imagine the average guy is forking out 3% of the value of his car for a track day policy.

I would bet that if I end up in front of a judge I would be covered but it would be nice to know upfront that I'm ok. I doubt a big insurance company like Liberty Mutual would adjust the language in all of their policies just because of me.
I just talked with the local State Farm agent and he said their policy does not contain ANY restrictions for track use or DE's. He said if they write you you're covered. I told him exactly what I was doing and sent him a link to the PCA website. They have different policies in different states and have no restrctions in my state. Seems too good to be true.
Hate to burst your enthusiasm, but what the agent told you over the phone is totally irrelevant as he is not the one that determines whether you are covered or not, but attorneys interpreting the "intent" of "related activity" or how they have "exercised" that provision with other policy holders, case law, precedents, etc. determines the outcome. Also, how long you have been with them, how many priors you have had do make a difference in the scheme of things. This, even if you get the agent to commit to his reading/perspective of what the policy says or doesnn't in his writing .......

As I said, ask in wiring what that exclusionary provision means from the insurance carrier. If he - the agent - responds, make sure he is responding on behalf of the insurance carrier not his franchise office's view.

I am sure the attorneys on the forum will be able to give you more legalese.

The rule for going to the track is a simple one: if you can't afford to write off the loss, don't get on the track.
no, no, no.... The exclusion language I started this thread with is not from State Farm. It is from my current policy with Liberty Mutual. Apparently, the State Farm policy does not have ANY exclusionary language. I have yet to read the actual policy though.

With respect to the Liberty Mutual language, I read it to say that I need to be competing in a type of contest that they cite or competing in any related activity. They also exclude practicing or preparing for the contest. I take this to mean a practice session or qualifying for the unallowed contest. To even get to the "related activity", one would need to be competing in something which a DE is far from.
Your point is valid. But, I will repeat, it is not what you interpret it to mean, it is what they - Mutual Liberty - wants it to mean when faced with a financial liability and they have the resources to drag this with legal dispute. Re-read your first post, they already told you that you are not covered based on their first reaction - irrespective of whether he/she knows what they are talking about or not. They may have even logged your conversation/inquiry if you gave them your policy number.

As I said, just seek clarification to what "related activity" means if you want to be more comfortable as that is totally gray. If you prefer to be off their radar screen, ask a friend to seek such clarification for you.
As a DE instructor, here is my assessment of the insurance situation. If anyone is running a lap timer at a DE event, or even taking lap times on a stopwatch, then the insurance company can (and will) interpret the event as "preparation for a racing event". Lap times = competitive event.

Sooooo---anyone at a DE event with timing devices present, officially or not, is at risk. And let's face it, someone is ALWAYS doing some sort of timing of SOMEONE at these events.

Enter the track at your own riisk, folks. IMHO