The insurance debate

To insure or not to insure? That’s the question. And it’s one for which I haven’t got all the answers to at the moment. As the idea of this blog is to open up information for potential participants in the Academy, here’s what I’ve found out to date…

So long as enough of the Academy entrants are willing to sign up, there is often a ‘deal’ on the table to cover drivers at the sprint and circuit races for the year. I understand that the  price was £1600 for the year. Prices year on year will obviously vary – and I have every confidence that the previous years entrants have more than a slight impact on the kind of deal being offered! Especially if it were their cars doing the impacting!

Hopefully someone will be able to clarify the deal in the comments to this post, but this covers you for £12,000 total damage over the season. However, every claim made comes with a £2000 excess (which also counts towards this £12,000 total insured value). I believe the cover is only for the 4 races and 3 sprint events. No testing or track days are included in the cover.

So, let’s take some scenarios:

Insurance best case:

Your car is damaged to the tune of £12,000 (I hope you’re OK….). Insured, you’re out of pocket £3,600 (premium plus excess) and you’re off and running. Uninsured, you’re looking at £12,000 bill…. for most, that’s unlikely to be met! Likely end of season…

That would be the end of your insurance though, and if you wanted to continue onwards insured, you’d have to re-insure and you can be certain that you’re next premium/excess will be far greater.

Insurance worst case:

If accident damage through the year never exceeds £2,000, you’re always going to be out of pocket for the £1,600 premium and would have been better off not insuring.

In fact, accident damage lower than £3,600 still leaves you behind.

So, as far as the insurance gamble goes, you’re really insuring on a major accident. Or two biggies (say 2 x £5,000). It’s also worst enquiring whether the insurance will cover VAT costs and labour costs. I would imaging most in the Academy won’t be VAT registered for their season, so VAT on a hefty repair bill shouldn’t be left to chance! And labour costs could be major.

A new chasis costs £4,500. Ally paneling costs about £200 per side. Rear panels not far off £100. Floor panels around £120 per side. Nosecone £160. Front wings £50. Rear wings £100. Gearbox around £1,200. Engine – somewhere close enough to £4,000.

If you do have a big one – then you can see how costs will mount quite quickly.  If you manage to bend a chasis, then insurance will immediately pay off for you. (As well as having to start your build all over again!)

However, it will be interesting to hear what’s normal from the Academy point of view. It certainly seems that most years have at least one fairly sizeable crash shown on Youtube…  But what do most people experience. I guess you can fix a fair amount of damage well within the £3,600 premium + excess costs and multiple minor prangs won’t be covered by insurance.

There are obviously far more variables to consider as well…. for example, you can clearly go and get your own premium and I know some chose to only insure for the track races – taking the gamble on the less risky sprint races.

Then there’s cover to consider for track / test days…

I’m not decided yet. It feels like a deal or no deal ‘banker’ offer that is always just not quite offering what would make it a no-brainer… It would be pretty heart braking to duff up the car beyond your own bank balance and not have any choice but to pull out for the year…

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