We just got a letter to the editor where a reader is wondering about life insurance and racing. He is an SCCA club racer and wants to get full life insurance, but his local agent isn't really helpful. We'd like to give him a really good response. What can you guys tell us about your insurance?
I went through this years ago. He needs to be very specific that he is doing SCCA Amateur racing. I was originally given a ridiculous quote, but when the underwriter had the specific information there was only a very small surcharge. Statistically you are more at risk playing volleyball at the family picnic.
The policy through my work does not have any exclusions for auto racing, flying a plane or other adventure/sports activities. There are some executives around here that have policies that don't allow them to race, ride motorcycles or fly planes (or have more than 2 on the same commercial plane). When I used to design insurance plans it was more of an underwriting/rate issue than an acceptance issue - but that can depend on the specific contract and company that's issuing it. By comparison to other things, auto racing on a track a few times a year is not as big of a mortality risk as other things like riding a motorcycle or 4 wheeler or skydiving. Some insurance companies may allow it, adding extra cost, others may not. Then again, most states have a two-year exclusionary period - meaning if you have had a policy and been paying premiums for two years, the policy can't be revoked or claims denied for things that may have been outside the realm of their underwriting rules but not necessarily excluded from coverage.
The deal is that every policy is a legal contract between you and the insurance company. You can skirt the rules a bit, but if it goes wrong before the exclusion period is up - the beneficiaries get nothing or if the company finds out you've been skirting the rules during that 2-year period, they can drop you. As far as coverage, there are companies that will take on about any risk - but their actuaries calculate it out and adjust the premiums to fit (i.e. Lloyds of London). For some companies, motor racing is an acceptable risk that may or may not have extra cost. Other companies exclude it - read the contracts.
For me, there was a few exclusions on the life insurance policy (not racing) but plenty for my disability insurance. Thankfully, the exclusions were for racing the car, not working on the car.
Per
Yeah, there are now agencies that specialize in insuring car collectors and racers. It's a nice change from years ago, when the kids were wee and Tim had a tough time getting life insurance due to his racing. We had to do a lot of back-and-forth to make the underwriter understand that he wasn't out at Spa dueling with F1 every weekend. Nowadays, it's possible to not only get insurance hassle-free, but actually deal with someone who understands the hobby.
We deal with Hagerty as well as Heacock personally, and both are excellent. Tim and the guys probably know of lots other insurers serving the community... a sign that sometimes things do, indeed, get better instead of worse.
Margie
I emailed someone I knew that handled life insurance for racers....
Hello Per, Thanks for emailing the letters-threads on life insurance coverage for race car drivers. As you might already know, we have been writing life insurance coverage for race car drivers for the past 15 plus years. As a race car driver myself, i understand most concerns drivers have with the validity of their coverage both on and off the track and most importantly the cost. Fifteen years ago, we had one major insurance company that would consider coverage for race car drivers within certain parameters on a standard (no rating or extra charge) basis. This contract as all contracts we broker includes full coverage for auto racing both on and off the track 24 hours a day. In fact the only exclusion is suicide within the first 2 years of the policy issue date (which is standard on all life insurance policies). Today, we have 12 major life insurance carriers who will consider life insurance coverage for race car drivers on a stardard or better basis. Interestingly, we have several life insurance companies who prefer open wheel cars - drivers and another group of companies who prefer closed wheel production cars- drivers. Again, all of our companies at major At rated companies who understand scca, bmw club, porsche club, grand am, nasa, and other racing or lapping day sanctioning organizations. Please let your readership know that most (not all but the vast majority) of club road racers should be able to obtain life insurance coverage both on and off track without paying a rated or surchaged policy premium. Finally, we are very proud to be SCCA approved broker for life insurance coverage and we currently insure 750 plus race car drivers through the united states and canada. Please let me know if you have any additional questions. Regards and thanks again, steve goldin 305-790-7600
I provided my insurance company with full-disclosure on my (very limited) rally-X activities. I explained what it was and the fact that it was low-speed (below 40 mph) and one at a time.
It was a non-issue.
I just changed from (gawdawful) whole life to new term policies in the past year. Figures I just started racing a year before that. But, it really wasn't an issue. I got charged a little more, but still less than my smoker wife has to pay. At the risk of being a Dave Ramsey commercial, Zander insurance really was a kick-ass way to buy life insurance. It takes a little while, but nobody local could touch the rates I wound up with.
You guys used to have an advertiser for this.
Out of 2,000 insurance companies, 12 have standard ratings for racers - I would be tempted to compare costs of a rated policy to the unrated - just to make sure...always a good idea to compare rates. There can be a fair bit of variability in their calculations.
Canoe insurance!
life ins. didn't help that one 
All I know about life insurance is it's the one thing you do not want to use.
I'll say it's really a crap-shoot, with the under-writers dictating what they think is important. This applies to all forms of insurance, be it life, auto, house, whatever. Which is why you can have such inconsistencies between providers, and over time.
To that end, pay attention to your policy and the changes in coverage. Be ready and willing to change if need be.
ddavidv gave a link previously to a place to shop for life insurance from different and obscure carriers. It was a great link. I can't remember what it was. Hopefully he'll see this and remember it and chime in.
Insurance companies and racing sure have changed over the years.
Years ago, Nationwide didn't want me to let my assistant drive my service truck because he drove a race car.
My, how things have changed.
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