Within the collector car hobby, the racecar subset contains some of the most valuable, beloved vehicles in the world.

But motorsports create unique challenges for insurers—prompting many racecar enthusiasts to opt for self-insurance over more traditional solutions.

According to Pete Doriguzzi, vice president of Heacock Classic Insurance, “that’s more of a racer’s mentality. I’m from the old-school thought that if I’m out on track with my car, I feel more comfortable with somebody who is self-insuring rather than leaving the risk to the insurance company.”

It’s called “seeing through the red mist,” Doriguzzi explains: “A racer gets charged with adrenaline. It’s maybe an ego thing, it’s maybe a hormonal thing, but the guy racing next to me who has insurance on his vehicle and says ‘I can write it off if I wreck the vehicle’—he may not be as safe a competitor as somebody who says, ‘I need to keep my conscience in check.’”

For this particular microcosm of the classic car community, third-party insurance for racecars “may not be the best thing,” Doriguzzi says. “Some people say that if you’re going to get into racing, you really need to keep your wits about you no matter what—don’t rely on that false comfort of having an insurance policy to protect you, because we’re not just worried about the cars, we’re also worried about human lives out on the track.”

IA spoke with Doriguzzi about the upswing in vintage racing over the last decade, the coverage challenges it presents and what agents can do to better serve their clients in this passion niche.

IA: Can you walk us through a brief history of the motorsports side of the classic car insurance market?

Doriguzzi: It’s been interesting to see the evolution of this, because we’re seeing people come into the vintage race side of things that may not have looked at vintage racing before. For semi-amateur, semi-professional and professional racing, the entry level is a little bit more than what some people want to commit to. It could be the timeframe, just the fact that the schedule may not work with them, or it could be price range or dollar figure.

For example, someone may want to get into professional racing, but in order to get anywhere with that, you really have to dedicate yourself to the whole season. And to get anywhere with development of the car and/or yourself, there’s a pretty big commitment that has to be made there. So some people are saying, “I’m not a professional race driver by day and I like to race, but I don’t want to have to do it as a profession or a business.” They see vintage racing as a way to scratch that itch and still be in a very cool car and go to some of the most historic tracks around the world.

Obviously not many carriers are comfortable insuring this type of high-risk activity. Almost every PAP has exclusions for racing—is the same true of classic car policies? How does the racing aspect complicate securing coverage for a classic car enthusiast?

Every collector car policy I’ve ever viewed does have an exclusion in its wording regarding racing and/or a vehicle on a racing surface. If a car is designated as a race vehicle, most insurance companies will not extend liability to the car. Typically, the exclusion will state that the vehicle is not covered for any racing or timed event of any kind on any facility, or within the autocross where there isn’t even a facility but it may be a parking lot or something like that. So the two pieces of the racecar policy that are going to be excluded will be liability for bodily injury and physical damage to others, and then physical damage while the car is on the racing surface.

The one thing we can do is cover the physical damage of the vehicle. In many cases, you’ll have a car that is a race vehicle, but it’s also an asset—it could be worth $50 million, and just because it’s not a street car doesn’t mean you can’t find insurance for it. So there is insurance for racecars. In our program, we call it our storage transit paddock coverage, and it provides coverage for the vehicle while it’s in storage, while it’s being worked on and serviced and maintained at a facility. Then, it’s also covered in transit while it’s going into the trailer to and from an event and while it’s in the paddock and not on the racing surface—we call that kiosk coverage. If a storm blows up or somebody backs their trailer into the car or it catches fire while it’s in the paddock, there’s coverage there. So we can provide some form of coverage at the first layer of the physical damage.

Unfortunately, there are not many insurance carriers that really know how to underwrite this and are comfortable with it. There are a few markets, not very many, and they tend to move around because they’re really not that profitable. The ones that have stuck around the longest have typically been the London syndicates. There are also a couple here stateside that have gotten into it for drag racing or a little bit of professional racing road racing, but none for dirt-style racing. So it is difficult to secure coverage there, and if you can find coverage, it tends to become fairly expensive.

Do you see a lot of vintage racing enthusiasts doing a combination of some traditional insurance and some self-insurance?

I have seen all sides of it. We see some people buy as much insurance as they possibly can afford—they want to insure everything because possibly they’ve had an experience in the past and they believe in insurance. Unfortunately, there’s also another aspect where a lot of people that get into this hobby, it’s their disposable income that’s allowed them to get to this point. To them, these assets are really just toys, so they look at it from a different perspective: “This is just a toy, and if I damage it or if it’s stolen, I write it off and I go get another one.”

But the normal way of insuring the car for on-track coverage is starting to take a little bit of a turn. In the past, the companies have always looked at it from one direction and said, “Just like you would insure a vehicle on the street, we need to insure the total amount of the vehicle.” But there are some ideas out there saying maybe we don’t need to insure the car for the full amount, but instead use almost a co-insurance concept, like an 80/20 co-insurance on a commercial auto policy. Let’s look at a number that maybe populates the majority of the damage you can do to a car and then have the insured pick up a portion of it, and we’ll provide another portion after the co-insurance has been met.

That might help some people out, because there’s always going to be the side of the argument that says, “I’d like to go vintage racing, but if I wreck one of these cars, I need some protection and I’d like to have insurance.” The insurance challenge may be a barrier to some people getting into the industry.

Any advice for independent agents with clients who are interested in vintage racing?

Something a lot of racers don’t really think about is spare parts. A racecar will typically require some spare parts—if you don’t need them now you will in the future, and there’s coverage there that also needs to be considered. It’s almost like the jewelry floater when it comes to the homeowners policy: Everybody’s eager to write the home, and then they sometimes don’t offer the fine arts or the jewelry, but it is a piece of the risk that needs to be at least questioned.

Then, there’s probably going to be a trailer involved, the racecar, spare parts and tools—those things can add up and become almost as much as a regular daily auto policy, depending on the value of the vehicle. There might even be a motor home that shows up because they need to tow that car to and from the racetrack. It’s really a good time to just do an overall review of the client’s needs.

Jacquelyn Connelly is IA senior editor.