[Wichita-SCCA] Borrow a car to race/autocross and wreck, who pays?

[Greg Laws]

The article laid it out pretty much like I've said before: The insurance coverage stays with the car, not the driver.  The owner of the car might as well turn in a claim for damages assuming that the damages are severe enough to be worth it.  That "enough" point is subject to personal situation but in my view anything under $1000 is to small to justify the claim.  Just grin and bare it if a sad but minor collision situation happens to you.    

Most collision coverage language says that you cannot sue the insurance carrier if they deny a claim.  They offer instead to go to arbitration, an extralegal process wherein there will be three judges with one from the carrier, one from you, and a third approved by both.  Both sides present their case and the judges decide.  Besides the uncertainty of the outcome there is a problem of payment for the process, most of which is born by you!  The process is intended, of course, to discourage arbitration by throwing up hoops of uncertainty, expense, and delay.  You are allowed to sue if the arbitration process results in a finding that you don't agree to but you still have to pay the arbitration bills and the odds of getting an attorney to represent you in a suit at that point are extremely low.  The attorney would want his fee (30%) up front regardless.  Following this trail to its conclusion would take months if not years and is simply not worth the effort unless the vehicle was worth major bucks such as that $120K Porsche.

Please note that even making an inquiry to your agent into possible coverage will likely be noted in your file and thus will eventually come to the attention of the underwriters.  This being the case, if you file a claim or even make an coverage inquiry then you should immediately start shopping for replacement coverage with the idea of switching carriers before they (a) settle/dismiss the claim &/or (b) refuse to renew your policy.

The odds of any of this happening are very low, but it can be quite unpleasant if it does happen.  

BTW: I suspect that the three innocent victim cars in the news story would be covered somewhere no matter what.  This is the case if you loan your car to a friend who then drives while drunk (an illegal act) and crashes into parked cars.  In that case they would cover both driven & parked vehicles under collision and liability coverages respectively.

In the event of liability-only coverage as per above then the driven car would not be covered of course but the liability coverage would go to the victim cars.  

If the driven car's insurance carrier denies coverage to everyone because of an exclusion against timed competition or whatever then the victim cars could go to their own respective insurance coverages for uninsured motorist coverage.  They would pay a collision deductible but otherwise would be taken care of.

The really hairy deal would be if two cars in motion and both competing on the same course at the same time ran into each other.  This happened at a past Solo National and both carriers denied coverage.  Ugly.

Greg Laws
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