HPDE Insurance

[z31maniac]

This is sticky worthy I think as there are a few here who track there cars regularly and this might encourage others who are afraid to take their car to the track to get out and enjoy it.

I was going to upload the policy directly to the site, but a .pdf isn't a valid extension. I'll email to anyone who can get it up on the site, in this thread, as a link or .jpg so you can read it, etc etc.

www.hpdeins.locktonaffinity.com <---- Is the site where you can apply for events.

Here is his info from the original thread on a local forum 6 months ago:

"I've spent the past 9+ months working hard to form an insurance program for the HPDE community. This involved talking with underwriters all across the world, finding one that met our financial requirements (A+ rating), designing a comprehensive policy form, and creating a website that will allow you to apply, quote, and bind insurance online.

Our website went live today. We are providing single-event, physical damage coverage (similar to comp and collision on your personal/street auto policy) for individuals participating in "approved events". To meet our approval process, events must offer classroom instruction, in-car instruction, require tech inspections, strict passing guidelines, etc. At this point, we are approving all BMW CCA, PCA, and ACNA events. There are a few other clubs that we will be approving very soon. My hope is that our insurance offering will get more people involved in the hobby and provide a competitive advantage to these clubs that focus on organizing educational, safety-oriented events.

For events that use MotorsportReg.com to handle registration, "approved events" will display a link to our site so participants can sign up for their single-event, on-track physical damage insurance. Or, enthusiasts can go straight to our website at www.hpdeins.locktonaffinity.com . Our event listing under the "Apply Online" section only has events through the end of August at this point. Over the next few weeks, the event listing will show events through the end of the year.

If you want to get a quote, just click "Apply Online" for any event and complete the application. At the bottom of the page you will click on "calculate premium" to get your quote. Most people have been shocked at how affordable the premium is. If you have any questions about the process or coverage, don't hesitate to contact me.

If you have friends or you are a member of a group/forum that would be interested in this policy, I would really appreciate it if you would tell them about our program. I've invested a lot of time and money into this program, and we need large amounts of participation to "spread the risk" and keep this program alive.

Thanks,

Ryan Staub"

[z31maniac]

Here are a few questions I exchanged with Ryan Staub, the agent for these policies. I wanted to get some clarification on the policies, especially being that I used to work in insurance.

Q. “Property covered with Restrictions” — It indicates these things are covered but that it doesn’t increase the overall limit provided for the “scheduled automobile.” Does this mean the car can be insured for only the Blue Book value and no more, or am I allowed to increase the coverage based on these restricted items. For instance, I drive an older BMW that books for only $3500, but has another $1500 in wheels, $2000 in suspension, $2500 in safety equipment. Could I insure the car for $9500 or whatever the total replacement value of all the parts are, or only for book value?

A. The vehicle should be insured for an amount close to that recommended by Kelley Blue Book or Edmunds. Our program is designed so that you first insure the base vehicle, and then add value for modifications that you have made to the vehicle. Your “base value” should be close to KBB or Edmunds. If you wish to insure for a higher amount, I would recommend that you print and file documentation showing that other similar vehicles are selling for a higher amount than that listed by KBB. During the application process we ask for details and value for each modification. You can insure the car for $9,500 but you’ll need to justify that value in the application (i.e. $3,500 for car + $1,500 wheels + etc + etc).

Q. “Valuation” — 1. Actual Cash Value, indicates the car will be paid for based on the Actual Cash Value minus a deduction for depreciation. From my understanding the Actual Cash Value of an item (car in this instance) already accounts for depreciation. This accounts for the difference between ACV and Replacement Cash Value in all other types of insurance contracts. The fact that my ’88 325is books for $3500 vs the original MSRP is taking into account depreciation. So I would like some more clarification on how the company applies depreciation to ACV settlement.
A. Our underwriter is working on a revision to the policy to make this section more clear. In the event of a total loss, the underwriter will pay the “agreed value” that you list during the application process if it is within a reasonable amount of the KBB or Edmunds recommended value – this is for the base vehicle. If there is a major discrepancy then we first ask you for documentation that your vehicle is worth a premium over KBB, and if that doesn’t work, then the appraisal comes into play.

Q. Continuing on the depreciation theme, I would like to know how depreciation is applied (and how it is calculated) to aftermarket parts such as a suspension or a set of wheels for instance. Or a body kit that is no longer available for purchase?

A. You need to insure modifications for retail value. They are covered at retail value if they are damaged in an on-track incident. For discontinued parts, you would either get “like” parts or payment for the value of these parts.

Q. Good to know. My follow up to this is a two-part question:
a. How does the settlement proceed in accident that isn’t a total loss? Is there depreciation applied in a non-total loss situation?
b. For the sake of discussion, it would seem that if I was going to use the company for all my HPDE’s (and I will, the E30 isn’t terribly expensive but I would upset if I binned it at the track) do you just keep the information on file, and we “renew” the policy for each event. Basically what I’m getting at is, it would be better if up front, before any track time or any incidents to get the company to “agree” that the car is nicer/irreplaceable at book value BEFORE a claim occurs. So if we were able to establish that, would we need to re-establish it before every event? Or could we just continue to use the same amount only taking into account any other modifications.

A. Depreciation will not be applied toward a partial loss. B - We are currently handling each policy as an individual transaction. Down the road we will have some additional capabilities that will allow you to sign-in and our system will remember your car, modifications, value, etc.

Q. Now, for the aftermarket parts, I’m going to assume that the company needs documentation of the parts. Since I purchased the car with many of the modifications already how could we go about documenting the parts? The main items would be the Ground Control track kit, camber plates, control arm bearings, Eibach adj sways and custom made adj sway bar end links. The wheels, header, exhaust, chip, injectors, and such I have receipts/documentation for, and well you can “see” them by looking at the car….same with the suspension though. I’m assuming things like harnesses, roll bars, seats, etc, “safety items” can be covered as well? For instance, if the car wasn’t totaled would the harnesses be replaced since they are kind of a one-time stress item?

A. Documentation on the details of aftermarket parts is not a big issue. We only need this information in the event of a claim. To be honest, we have taken our customer’s word on this for the claims we have had. It would be wise to just have information on hand about the details and retail price of the parts…receipts are not required. Safety items including harnesses can be covered. They would be replaced in the event of a front/side impact.

Q. From your answer to number three in your response, it seems as though depreciation isn’t really applied to anything? Although I would want to actually see that in writing in the policy. Are you an agent for the company or merely a liaison?

A. We act as MGA for RLI on this program – so yes, I am an agent. Since you were previously an insurance guy, think Inland Marine when you’re reviewing the policy. That is the approach that the underwriter has taken in designing the policy for this program.

Q. At what point is a car considered a total loss?
A. Unfortunately there isn’t a set percentage of loss that makes a car “totaled” – many factors come into play.