THSCC Forums

Well, the free ride is over, there has never been an exclusion on the NC auto policy for racing, etc. but one has been put in under the cover of darkness.
here is the actual endorsement:

The North Carolina Rate Bureau [the means this is in all policies in NC-cline] revised the Amendatory Endorsement by adding a Racing Exclusion to the Liability Coverage, Medical Payments Coverage and Coverage for Damage to Your Auto sections of the policy. The Amendatory Endorsement, NC0013 (Ed. 4/12), amends the Personal Auto Policy, NC0001 (Ed. 6/05). This change applies to policies effective 10/1/2012 and after.

Part A – Liability Coverage

Liability Exclusion B.3. is being added to exclude liability coverage in excess of the minimum limits required by the financial responsibility law of North Carolina for damages arising out of any prearranged, organized or spontaneous racing contest, speed contest, demolition, stunt activity or competitive driving event (including any practice or preparation for such an event). The exclusion also excludes liability coverage in excess of the minimum limits required by the financial responsibility law of North Carolina for damages arising out of the use of a vehicle at any facility designed for racing or high performance driving, unless it is being used for purposes other than high speed or high performance driving.

Part B – Medical Payments Coverage

Medical Payments Coverage Exclusion 12. is being added to exclude medical payments coverage for damages while occupying any vehicle that is participating in any prearranged, organized or spontaneous racing contest, speed contest, demolition, stunt activity or competitive driving event (including any practice or preparation for such an event). The exclusion also excludes medical payment coverage arising out of the use of a vehicle at any facility designed for racing or high performance driving, unless it is being used for purposes other than high speed or high performance driving.

Part D – Coverage For Damage To Your Auto

Coverage for Damage To Your Auto, Exclusion 14., is being added to exclude damages while occupying any owned or non-owned auto arising out of any prearranged, organized or spontaneous racing contest, speed contest, demolition, stunt activity or competitive driving event (including any practice or preparation for such an event). The exclusion also excludes damages arising out of the use of any vehicle at any facility designed for racing or high performance driving, unless it is being used for purposes other than high speed or high performance driving.

The Amendatory Endorsement NC0013 (Ed. 4/12) and the stuffer that explains the changes to the Policyholder, UF-4841 (Ed. 10/12), are available on Forms-On-Demand.

What does that all mean?

Part A- if someone makes a claim against you the company only has to pay the minium limits of 30k per person or 60k per accident for Bodily injury or 25k for Physical damage.

Part B & D. No coverage for you or your car.

As far as I know this hasn't been tested in court which will show how it finally shakes out. Does an Autocross come under the definition of a speed contest. I DON'T KNOW. What about a driving school? I DON'T KNOW.

IN MY OPINION: The greatest risk you face is running over a kid in the paddock, by the letter of this endorsement that kid can only receive 30k for their injury. I would be suprised if a company would deny coverage based on this exclusion. Other damage, they might. I have always told my clients: If you have an incident at the track the company will pay and then probably cancel (I say that for all companies) Now I don't know if they will pay.

I have been talking with Jeff Hall (another racer in the insurance business, no relation) and we both aren't sure of the final shake out. It has also been hard to keep a company that want's to do the track coverage so I am suggesting if the risk bothers you go through Lockton Affinity or some one like them. I think there is a link to them on Motorsportsreg .
I'll keep you posted.

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2002 MCS, 2003 MCS Track Rat, 2003 Generic White Yukon, 2003 BMWk1200rs, 1973 CB350F, 02 996. 08 Cayenne Turbo
http://www.clinehallagency.com

Thanks for the update Cline. Here is the link to Lockton Affinity's site. I contacted them a few months back and I believe all of our DE's are on their list of events to chose from.

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Stephen Westerfield
2009 Infiniti M35 | 2007 Honda Fit Sport | 2005 Ford Mustang GT |2000 GMC Sierra |1992 Acura Integra LS | Super Westerfield Bros Acura Integra

Thanks for the update. Should we consider this for autocross as well? In re: the "kid in the paddock" scneario, does an umbrella liability policy also cover this?

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Steve Carter
1972 Datsun 240Z-- resto pics at http://picasaweb.google.com/srcartermd
2007 GPW Honda S2000-- STR 86

IANAL, but the language definitely sounds like HPDEs are no longer covered. In Part A, it seems like a driving school gets a pass, but then there's the clause of:



I'm guessing it's going to be a push to claim that your fully caged, uh, street car was involved in an 80mph accident while crossing the bridge to leave the VIR in-field.

Companies like Lockton seem to provide physical damage policies for your car. Big deal. Even if you have a very expensive car, BY FAR the biggest risk, monetarily, you risk at an event is liability. If you're judged at fault (and even if you end up winning in court, the costs will be astronomical most likely), liable, in a worst case scenario (say a death or disablement of another driver, instructor, etc), the risk to your assets and/or future will far exceed whatever your GT3RS is worth.

So Cline, does the typical umbrella liability policy pick up where the now truncated auto policy stops? Have they closed that door also, so you are left out to dry in a worst case liable event?

For those that instruct and use instructors, now is probably the time to carefully consider the risks you are undertaking when either you get into someone's car or they get into your car since, as I said above, that potential risk is far greater in magnitude than any value of your car.

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Current stable:
2019 BMW M2 Competition slicktop 6MT
2011 BMW M3 sedan slicktop 6MT
2007 BMW 328i wagon (slushbox for now)
1975 CanAm 125MX2

This is a huge can of worms!!

When you talk to an insurance underwriter, claims person etc. they just automatically say there will be no coverage. I have mentioned Autocross and HPDE and I get the answer of no coverage. The way the exclusion is written I would have to come to that same conclusion. An umbrella policy does not kick in unless the underlying policy (in this case-the auto policy) is exhausted. Meaning if you have a 250k auto policy that has to be used up before the umbrella kicks in. With this exclusion it doesn't kick in.

I have talked to one of my claims VP's and she is going to "marinate" on it a while and get back to me.

This has not been tested in the courts in NC so it all remains to be seen.
I have never seen the policy that the clubs and track use but I am ASSUMING some liability coverage could be picked up there.

As far as hitting the kid in the paddock. I think a good case could be made for that being the case of "unless it is being used for purposes other than high speed or high performance driving"

I'm going to try to track down and agent from Virginia that does HPDE's with PCA and find out how they handle there.

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2002 MCS, 2003 MCS Track Rat, 2003 Generic White Yukon, 2003 BMWk1200rs, 1973 CB350F, 02 996. 08 Cayenne Turbo
http://www.clinehallagency.com

emphasis mine. you mean the auto policy doesn't kick in...so that means the liability policy does, right? I also worry about the "hit the worker re-setting a cone" hypothetical.

Better get the overlap right as well. Two cars on course without a good starter and overlap could be......anxiety-provoking.

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Steve Carter
1972 Datsun 240Z-- resto pics at http://picasaweb.google.com/srcartermd
2007 GPW Honda S2000-- STR 86

As an aside, this is probably a good time for the club to refocus on the liability waiver that everyone is supposed to sign at events. I think the officers at autox events do a good job at trying ensure everyone present has signed the waiver, but I'd like to impress upon those doing gate duty to be extra vigilant ensuring that you get readable names on the waiver and that everyone who is within the confines of the event has signed the waiver (i.e. if you are early gate, inevitably there are some who have already entered the grounds before you get started, so make an effort to get them signed).

Also, to gate workers, I've noticed the few times I've worked gate in the recent past that many of the waiver pages are not filled out on top with the event location and date. I make it a point to fill in that data for a number of sheets at the start of a gate assignment, front and back on each. It will be a profound mess if someone had to file back through these undated, unmarked location waivers to attempt to figure out if someone at an event signed a waiver. It will potentially get the whole waiver thrown out in court too if the club can't prove that the sheet was from a specific event (i.e. filling in that detail at a later date, particularly if such occurs when it's needed most, isn't going to cut it I wouldn't think).

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Current stable:
2019 BMW M2 Competition slicktop 6MT
2011 BMW M3 sedan slicktop 6MT
2007 BMW 328i wagon (slushbox for now)
1975 CanAm 125MX2

I took it to mean that since the auto liability limits are truncated by this new regulation (30k) and therefore liability coverage limits of the auto policy (250k) are not met, then the umbrella policy is worthless in a claim in this case (i.e. the rules for the umbrella are not met hence it is unusable).

_________________
Current stable:
2019 BMW M2 Competition slicktop 6MT
2011 BMW M3 sedan slicktop 6MT
2007 BMW 328i wagon (slushbox for now)
1975 CanAm 125MX2

Correct

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2002 MCS, 2003 MCS Track Rat, 2003 Generic White Yukon, 2003 BMWk1200rs, 1973 CB350F, 02 996. 08 Cayenne Turbo
http://www.clinehallagency.com

That is exactly what I was hoping it was NOT. So...track incident and injures another person = they can destroy you and any personal wealth you may have accumulated via lawsuit, even when you have a liability policy? If so....yikes.

edit: can the track day insurance be applied to autocrosses, now that umbrella policies are useless?

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Steve Carter
1972 Datsun 240Z-- resto pics at http://picasaweb.google.com/srcartermd
2007 GPW Honda S2000-- STR 86

This is unfortunate and not that I am trying to sound dramatic, but this is just another reason it will continue to be harder and harder in the future to enjoy doing what we do. I see this impacting (and targeting) not just HPDE, but also Autocross, Rallycross and maybe even TSD Rallies. I suspect it may also inadvertently impact things such as teen driving schools (that actively explores the limits of a car) when held at race tracks. I expect those driving schools have their own liability, but that individual liability has always been up to the participants?


That passes my "common sense" sniff test. But as you said earlier, I guess disputes (and how this works in practice) may end up settled/defined in court.


It would be interesting to know where we are with respect to other states (I assume we are not the first) and how these other states handle the same problem.

Richard

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Richard Casto
1972 Porsche 914
2013 Honda Fit Sport
2015 Honda Fit EX
http://motorsport.zyyz.com
Money can't buy happiness, but somehow it's more comfortable to cry in a Porsche than a Kia.

Point will be brought up with officers and gate workers, thanks for the heads up.

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2011/2012 Autox VP
2013/2014.5 President
2013 Top Gun

2015 Fit

22R-EC => 4G63 => D16Y7 + D16Y8 => EJ255 + K24Z2 => K20Z3 + K24Z2 => K24Z2 + M54 => L15B

Find a track day insurance policy that covers significant liability as opposed to just property damage to your personal car...

Note that most "assume" that the waiver they all sign "covers" them from being sued by another participant, something that has been proven untrue in court at least in the case of that Porsche GT claim a couple of years ago. Club officers should also consider personal liability policies of some fashion in case they are caught up in a worst case situation also.

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Current stable:
2019 BMW M2 Competition slicktop 6MT
2011 BMW M3 sedan slicktop 6MT
2007 BMW 328i wagon (slushbox for now)
1975 CanAm 125MX2

Isn't "significant liability" what Lockton covers for HPDE?

The good news (I guess) is that personal liability policies are not that expensive. Since I have not done a track day event, any ideas on the ballpark figure for coverage? I know it depends on amount of coverage, but I would assume standard values like 500k/1M/2M?

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Steve Carter
1972 Datsun 240Z-- resto pics at http://picasaweb.google.com/srcartermd
2007 GPW Honda S2000-- STR 86