USC insurance policies cancelled

[TBW365]

Hi,

My mate went to USC at Santa Pod last weekend and took his car down the strip. This morning he received a letter from Direct Line stating that they were exercising their right to cancel his policy. They had representatives at Santa Pod who were noting the registrations of all vehicles that went down the strip and running them through their systems

For anyone who is planning to take their car to drag strips or other raceways, it may be a good idea to cover your registrations

[Llanigraham]

Nearly all insurance companies exclude motor sport use from their policies, so if he hadn't told them he was at fault. It would have been in the T & C's, but how many people bother to read them?

[gac]

IMO there's a difference between "policy exludes motorsport" which I would take to mean that they just wouldn't cover any incidents related to motorsport (as with recovery companies who won't recover directly from Santa Pod but have no problem recovering a car that's clearly marked up for drag racing from a supermarket about half a mile away) and "any motorsport will get your policy cancelled immediately".

Not sure on the wording on my own policy as I'm not planning any motorsport but if it only said the former then I wouldn't bother telling them either, I'd just make sure I could meet any costs and if necessary get a day of specific trackday insurance which would be valid for that day meaning I wouldn't expect any cover from my day-to-day insurance...

[Tech1e]

What a load of crap, what he does with his own car his own buisness. Hes not trying to claim anything so why would an insurance company want to void his insurance?

[Llanigraham]

If the policy says "excludes motorsport use" (or words similar), which most do, then taking part in any type of motorsport, on the track or road, will immediately invalidate that policy. It doesn't matter whether it is likely to result in a claim or not. As far as the insurance company's are concerned that driver becomes a greater risk, even if he actually doesn't. I'm afraid that in the Insurance world motorsport is perceived as dangerous and risky.

The "track day" use is more problematical, since in general this is not classed as motor sport as it is untimed and not generally subject to MSA or other regulatory bodies regulations, however even here companies have cancelled policies because they haven't been told about it.

Insurance is a minefield, and as I said earlier, a lot of people do not bother to read the T & C's of their Policies, and then complain when they find they have problems. A little research can solve lots of these.

I'm lucky as my standard fully comp policy covers me up to and including National B level motorsport of all types in the UK, and is very unusual. My Motor Club arranged it years ago and it has been carried forward for members ever since.

EDIT.

He has now got to mention he has had a polcy cancelled every time he applies for insurance in the future!

[gac]

So how do people on here get on with trackdays? Obviously you buy a day of specialist track insurance to cover you on the track, but clearly companies shouldn't just cancel your policy like that because otherwise people on here who are trackday regulars would never be able to get insured again (after declaring they've had policies cancelled left right and centre). I can't see how companies can get away with simply cancelling a policy altogether through something which can't cause any extra risk to them because you've got separate insurance for that specific purpose, the only thing they're liable for is you driving to/from the track which they would be anyway even if you went down to spectate? Obviously I can see why they wouldn't uphold any claims made as a result of motorsport (whether that be damage to your own car, other cars, or the track itself) but for them to then invalidate your road insurance seems wrong :/

And if people saw them racing at Pod, what's to say that actually your insurance wasn't cancelled as soon as you'd been spotted and even if you'd made a claim on the way home you'd have been uninsured or indeed driving uninsured without being aware? If your insurers are within their rights to do this, presumably they're also within their rights to refuse a claim as soon as it becomes evident there's motorsport involvement?

[Llanigraham]

As I said, track days don't seem to come into the motor sport description with most companies, but it is worth asking the question.

I doubt that the policy was cancelled that quickly, since I doubt if those trackside would have access to the central computer, plus they would need to check exactly what is said on that particular policy. The holder might have notified them, after all.

As I keep saying, read the T & C's!!

[pigeon142]

If the policy says "excludes motorsport use" (or words similar), which most do, then taking part in any type of motorsport, on the track or road, will immediately invalidate that policy. It doesn't matter whether it is likely to result in a claim or not. As far as the insurance company's are concerned that driver becomes a greater risk, even if he actually doesn't. I'm afraid that in the Insurance world motorsport is perceived as dangerous and risky.

The "track day" use is more problematical, since in general this is not classed as motor sport as it is untimed and not generally subject to MSA or other regulatory bodies regulations, however even here companies have cancelled policies because they haven't been told about it.

Insurance is a minefield, and as I said earlier, a lot of people do not bother to read the T & C's of their Policies, and then complain when they find they have problems. A little research can solve lots of these.

I'm lucky as my standard fully comp policy covers me up to and including National B level motorsport of all types in the UK, and is very unusual. My Motor Club arranged it years ago and it has been carried forward for members ever since.

EDIT.

He has now got to mention he has had a polcy cancelled every time he applies for insurance in the future!

This is incorrect an insurance companies perceptions are irrelevant as this is a matter of contract law. Excludes motorsport means that you are not covered for motorsport ie there is no cover in place whilst taking part not that it invalidates the poicy. I am well within my rights to insure the car with a separate company one example is pizza delivery drivers. It is not a list of restrictions on you but on the cover provided.

Having checked my policy I only have to declare a change in employment at renewal, if I decide to deliver pizzas most companies provide insurance for the time that you are working (ie carriage of goods) you therefore do not need to increase cover with your existing insurer. I would therefore be under no statutory or contractual obligation to declare this, except at renewal, as I would be properly insured.

This is a case of of the company abusing their power

Edit:

On the other hand an insurance company can cancel a policy without reason according to their terms, although this may be inbreach of various legislation including UCTA and EU law.

[Tech1e]

Cover or take your plates off I guess then.

SCN has already given one insurance sponsor the boot as they were using the site to check up on if vehicles were modified and not declared on policies. Which to be fair if your modified then you should by law tell the insurance company but it was all rather underhanded so they banned them.

[pigeon142]

Yes, although not declaring mods is fraud or breach of contract at best.

I have read through direct line policy terms online there is no reference to cancelling policy for trackday use which is defined as

"Track day – when your car is driven on a racing track, on an airfield or at an off-road event."

In fact it defines a track day in the terms but then does not mention it again in the policy???

"Use on airfields

We will not cover any injury, loss, damage or liability caused by using

your car in any area where aircraft are normally found to be landing,

taking off, moving or parked"

Surely if this voided the policy it would say here, it seems they have simply exercised the generic cancellation term rather than for a specific breach of the insurance contract.

[rwbaldwin]

Cover or take your plates off I guess then.

SCN has already given one insurance sponsor the boot as they were using the site to check up on if vehicles were modified and not declared on policies. Which to be fair if your modified then you should by law tell the insurance company but it was all rather underhanded so they banned them.

DL have been at Santa Pod before but they were looking to see if a car they were insuring had undeclared mods.

[shark_90]

but it was all rather underhanded so they banned them.

Someone banned from SCN? I don't believe it.

[Llanigraham]

Pigeon,

if the is a "no motorsport" comment in the T & C's of a policy then it means what it says. It cannot be argued about. You can try arguing contract law with an insurance company as long as you like; why do you think that their T & C's often seem so vague?

Sorry, but this problem has been known about for years in the motor sport world, which is why there are specialist companies out there.

[gac]

Cover or take your plates off I guess then.

SCN has already given one insurance sponsor the boot as they were using the site to check up on if vehicles were modified and not declared on policies. Which to be fair if your modified then you should by law tell the insurance company but it was all rather underhanded so they banned them.

m0rk never answered when I asked, but I believe they've been allowed back on now. Or at least their name isn't censored anymore, I used it in a post the other day and it was there clear as day. Whether that means they're back on as sponsors I don't know, I haven't looked since I'm not with them anymore (don't insure vRSes!). I know the filter is still working as I tried PMing someone about Shark and it still gets blocked...

[jrw]

Pigeon,

if the is a "no motorsport" comment in the T & C's of a policy then it means what it says. It cannot be argued about. You can try arguing contract law with an insurance company as long as you like; why do you think that their T & C's often seem so vague?

Sorry, but this problem has been known about for years in the motor sport world, which is why there are specialist companies out there.

The 'no motorsport' means that the policy you have against that car does not cover motorsport. IE if you crash on a track they wont pay out.

This in no way makes your policy void. You are on private land in a private car so what you get up to is your business, not the insurers.

There is no way legally they can cancel your policy because a 'DL rep' has seen your car going down a strip.....it is simply nothing to do with them.

[pigeon142]

Pigeon,

if the is a "no motorsport" comment in the T & C's of a policy then it means what it says. It cannot be argued about. You can try arguing contract law with an insurance company as long as you like; why do you think that their T & C's often seem so vague?

Sorry, but this problem has been known about for years in the motor sport world, which is why there are specialist companies out there.

"if the is a "no motorsport" comment in the T & C's of a policy then it means what it says" - Where does it say that ??? It usually says (on the certificate only) no cover shall be extended whilst participating in motorsport, racing or time trials for example which by implication means that it is allowed or it would say that participation is forbidden and voids the policy.

I don't doubt that an insurance company would attempt cancellation and indeed they claim that right in the contract to cancel without any reason. This does not mean it has any basis in law (which the insurance company is subject to), just look at their disregard for discrimination law.

It is not an insurance company that I would be arguing with but I would consider a challenge for breach of contract after researching the basis of their generic term allowing them to cancel without cause.

My point is that they may have had the right to cancel but he has not breached the contract in anyway by taking his car off road to use as he pleases and to suggest otherwise is wrong.

[jrw]

"if the is a "no motorsport" comment in the T & C's of a policy then it means what it says" - Where does it say that ??? It usually says (on the certificate only) no cover shall be extended whilst participating in motorsport, racing or time trials for example which by implication means that it is allowed or it would say that participation is forbidden and voids the policy.

I don't doubt that an insurance company would attempt cancellation and indeed they claim that right in the contract to cancel without any reason. This does not mean it has any basis in law (which the insurance company is subject to), just look at their disregard for discrimination law.

It is not an insurance company that I would be arguing with but I would consider a challenge for breach of contract after researching the basis of their generic term allowing them to cancel without cause.

My point is that they may have had the right to cancel but he has not breached the contract in anyway by taking his car off road to use as he pleases and to suggest otherwise is wrong.

I believe looking at the DL policy wording that they have to give you a reason to cancel and can't just cancel.....Only the policy holder can 'cancel at anytime'

In fact the DL policy does not mention track days besides the policy definition part and the only exclusion anywhere near this is the Nurburgring exclusion.

I totally agree that they can't cancel your policy for 'motorsport'.

If they could cancel the would put something along the lines of:

No cover shall be extended whilst participating in motorsport, racing or time trials. The participation in motorsport racing or time trials in prohibited whilst the vehicle is insured under this policy and any evidence of the vehicle being involved in motorsport could make this policy invalid and your cover cancelled.

[SkyInsurance]

If this is true is sounds utterly pathetic. What you do in your car, in your own time, on private land is up to you.

Ollie

Sky Insurance

[rwbaldwin]

Just spoken to the insurance guy who lives near to me. He's not an insurance salesman but is high enough in the insurance industry to be making policy. This is not his area of expertise (he's a expert in 'geographic factors'), but this is what he had to say...

He says that to terminate a policy an insurance company would have to show an increase in risk - not just during motorsport - but afterwards when the car is back on public roads. He doesn't know for sure but he could argue that there is probably a higher risk of catastrophic failure after taking part in motorsport.

He would point to the fact that most warranties would be void - not just if the car breaks down during motorsport but if the car had ever taken part in motorsport prior to the breakdown. This shows that they believe the car is less reliable after motorsport - this would include manufacturers and if they think motorsport can create an issue - who are the insurance companies to disagree.

He said that the insurance companies are not the only ones attending these events. He knows of at least one "very well known extended warranty company" that has recently started monitoring these events. I asked if it was Warranty Direct, but he wouldn't say.

[pigeon142]

I believe looking at the DL policy wording that they have to give you a reason to cancel and can't just cancel.....Only the policy holder can 'cancel at anytime'

In fact the DL policy does not mention track days besides the policy definition part and the only exclusion anywhere near this is the Nurburgring exclusion.

I totally agree that they can't cancel your policy for 'motorsport'.

If they could cancel the would put something along the lines of:

No cover shall be extended whilst participating in motorsport, racing or time trials. The participation in motorsport racing or time trials in prohibited whilst the vehicle is insured under this policy and any evidence of the vehicle being involved in motorsport could make this policy invalid and your cover cancelled.

This is what I read??

"We have the right to cancel this policy by sending seven days

written notice to your last known address. If we do, we will

return the premium less an amount for the period the policy has

been in force. The certificate of motor insurance remains our

property and you must surrender it to us within seven days of the

cancellation date."

Just spoken to the insurance guy who lives near to me. He's not an insurance salesman but is high enough in the insurance industry to be making policy. This is not his area of expertise (he's a expert in 'geographic factors'), but this is what he had to say...

He says that to terminate a policy an insurance company would have to show an increase in risk - not just during motorsport - but afterwards when the car is back on public roads. He doesn't know for sure but he could argue that there is probably a higher risk of catastrophic failure after taking part in motorsport.

He would point to the fact that most warranties would be void - not just if the car breaks down during motorsport but if the car had ever taken part in motorsport prior to the breakdown. This shows that they believe the car is less reliable after motorsport - this would include manufacturers and if they think motorsport can create an issue - who are the insurance companies to disagree.

He said that the insurance companies are not the only ones attending these events. He knows of at least one "very well known extended warranty company" that has recently started monitoring these events. I asked if it was Warranty Direct, but he wouldn't say.

Again as long as you answer the questions in the proposal correctly it is for the insurance company to calculate risk. If, partway through the term of the contract. the insurer belives the risk is higher that is tough luck as they have entered into a contract to insure you. Both sides must abide by the terms of the contract and this contract does not preclude use either off road or on trackdays.

Your only obligation is to be truthful, would taking a car at high speed in Germany make it more likely to fail? how would the insurer deal with a Porsche which is built for being taken at high speed?? Insurance companies spend a lot of time working out risk factors I agree but they are bound by contract law on this one.

If they wish to exclude this use, the proposal would have to ask if at any time will your car be used for motorsport at a trackday or dragstrip for example. You would then have to answer truthfully and they could then possibly look at the risk.

Is it possible that there is more to this like as mentioned before an undeclared modification?? (Not pointing fingers just asking)

[m0bov]

Its the driver who is insured so surely they have to prove it was he policy holder that was driving it?? :wonder:

[gac]

But they insure the driver on a particular car at a pre-agreed risk level, so regardless of who was driving it they can cancel the policy if they see an increased risk to the car. Equally, if I bought and insured a bog standard Fabia and then got my mate to fit a full vRS bodykit and wheels to it, that could still invalidate my policy because I've changed the risk. Just because I didn't fit the bodykit doesn't excuse it.