Roger M. Woodbury
rmwoodbury at downeast.net
Sat Aug 17 13:03:43 EDT 2002
The problem here is that insurance companies don't really care about the
"exception" to the rule. Insurance companies make underwriting rules based
on experience and statistics, and exceptions aren't of interest.
A driver education event, in order to count in insurance parlance, would
have to have some sort of credible sanctioning, or licensing. That in turn,
woould require some sort of recognized curriculum that could be proven by
some form of expert documentation to make a difference, and therefore, make
any form of accelerated risk bearable for the "standard" underwriting and
rating procedures used by companies. Knowing a dozen or so people who could
testify that "X" driving school program helped them is worthless, when
making underwriting rules that apply to potentially thousands of vehicles.
Most people don't realize that the underwriting process for any given
automobile policy isn't really done by people at all. It is mostly done in
a matter of seconds, after data on the application is put into a computer.
If the data on the application meet predetermined and preprogrammed
perameters, then the policy is issued. If the data doesn't jibe, the
application is referred to a higher level of underwriting, or possibly just
declined. If you think about the amount of money that an insurance company
collects on any one policy, versus the amount of exposure that that premium
represents, you can begin to see why "exceptions" to the rule aren't
The final arbiter of coverage, however, is the claims department, and the
decisions regarding coverage are made AFTER the loss has occurred. If the
policy has an exclusion, many many insurance companies will end up using the
exclusion and declining a loss, especially if there is ANY question about
use of the vehicle under the insuror's underwriting terms. This is
particularly so as the severity of the loss increases.
Now, I will grant that a driver's ed program generally doesn't involve timed
runs, or any particular amount of speed....normally....but I attended a PCA
President's meeting where the commonly shared joke was that Driver's Ed
wasn't REAL (wink, wink) racing. I spoke at that meeting about the dangers
of assuming that the normal personal auto policy would provide coverage, and
had a number of people there go pale when they realized that they MIGHT be
at risk for a serious loss with no where to go for their own protection.
Having had to argue at great length to get losses covered that SHOULD have
been covered, I would never, never, never take the chance that my automobile
itself, or my net worth, could even potentially be put in jeopardy, and
before I would take one of my cars out onto a private track in proximity to
other cars on the same track, I would make sure that I had MY OWN insurance
that would cover me on that track at that time, without ANY fear of
exceptions being raised AFTER the wreck.
People totally misunderstand automobile insurance,a nd it amazes me that for
the most part, people worry about damage to their CAR. Automobiles are
primarily throw-away items. But a relatively low physical damage accident
can end up costing hundreds of thousands of dollars in bodiy injury that can
have an effect on drivers and their families for decades. It is simply not
a place that I would want to go.
----- Original Message -----
From: "Patrick Martin" <mardkins at msn.com>
To: "Roger M. Woodbury" <rmwoodbury at downeast.net>; <C1J1Miller at aol.com>
Cc: <200Q20v at audifans.com>; <quattro at audifans.com>
Sent: Saturday, August 17, 2002 11:19 AM
Subject: Re: Wham!
> I think it depends a little on the event. Timed events are obviously
> considered speed events but an event that has instructors and a school
> atmosphere could easily be sold as a learning event. That is not to say
> that some "schools" are just a pretense for going fast on a track with
> minimal instruction and very little safety value. That would also exclude
> "race school" which clearly should not be covered.
> I think for the most part Audi Club events are truly educational and could
> be sold as such to the carrier. I can produce 4 or 5 people in a
> who could attest that one of our events has saved them major
> some on the way home from events.
> There has been a couple of carriers that specifically exclude any damage
> done at a racing facility. I guess that would exclude you if you hit
> in the mall parking lot that occasionally gets used as an autocross :-) ,
> We did have an 00 S4 back into a concrete wall at one of our recent events
> and the insurance company paid without complaint. FWIW.
> Pat Martin
> President Audi Club Northwest, A Chapter of Audi Club North America
> > I wonder who the insurance carrier is, and if you have really read your
> > insurance policy.
> > Somewhere in the policy probably lurks an exclusion for "speed events,
> > including practicing for speed events, racing, including practicing for
> > racing....."
> > This is a universal exclusion and I know of no insurance company that
> > doesn't use basically the same wording. Several years ago, as the
> > of a PCA Region, I had quite a few conversations with Porsche owners who
> > thought their standard auto policy would provide coverage for them while
> > involved in PCA "Drivers Ed" programs, as "Drivers Ed" wasn't (wink,
> > "REAL" racing.
> > For most insurance companies, this is a local option adjustment, and
> > not corporate policy. IF no speed is involved, then coverage might be
> > afforded. However, if the area claims manager has little use for, or
> > knowledge of, the various types of track events that exist, then it is
> > for coverage to be declined.
> > What most people don't understand is that the final arbiter of claims
> > the agent who sold the policy, or the underwriter who issued it. The
> > arbiter of a claim is the CLAIMS DEPARTMENT, that will determine
> > coverage at the time of loss.
> > I spoke specifically with my own insurance carrier, which is USAA. I
> > of people located in some states that had been specifically told that
> > WERE covered for PCA Driver's Ed by the regional USAA management. The
> > Northeast Region of USAA specifically told me that NO form of speed or
> > racing or practiciing for that was covered, Period, PARAGRAPH. When I
> > them that that was not universally the case throughout USAA, the answer
> > that in some states, local Claims Managers made different decision until
> > there was a history of loss to do otherwise. Rallys were covered, as
> > gymkhana type of events, which are specifically defined as very low
> > Time Trials (which is what I was specifically concerned with) were
> > specifically excluded THROUGHOUT USAA.
> > If you read through the full policy (which you might not even have,
> > incidentally), I am quite sure that you will find the exclusion. If
> > chose to actually pay you the actual cash value (Book Value) for the
> > then you will, in my opinion, be fortunate.
> > Now, you have put money into your car to make it otherwise than whatever
> > "normal" model was. That may or may not be recoverable. In order to
> > establish that you have a value higher than a similar car, with similar
> > mileage at the time of loss, you will have to be able to document that
> > "improvements" that you made actually increased the "Actual Cash Value"
> > the car. Merely the value of the changes that you made won't do
> > fact that you have receipts, for instance, probably won't impress an
> > adjuster. However a statement from a dealer that your car, would have
> > retailed on HIS lot for the "book value" plus "X dollars", BECAUSE of
> > improvments that you made, will.
> > Throughtout the years that I spent in the property and casualty
> > business, although I did not do much personal automobile business, I did
> > successfully argue for increased value for some cars that were worth
> > considerably more than "book value". The biggest success that I had,
> > VW Microbus that had a "book value" of $300. It burned, but not long
> > before, the owner had put nearly $1800 into mechanical restoration. I
> > three dealers in his town to give a value for THAT vehicle sitting on
> > used car lots....a VW dealer, and Ford dealer and the Chevy dealer. The
> > average was around $2200. The client recovered his $1800 in the
> > settlement, but it took some work on his part, and, of course, the
> > documentation from independent automotive sources.
> > Good luck.
> > Roger
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