When you're watching a Formula One race, or any other type of automobile race for that matter, you might be wondering how the drivers go about protecting themselves.
Granted, you can see the obvious things like helmets, fire resistant suits and 5 point harnesses, but what about the things you can't see such as insurance like Belairdirect, from the website Mychoicecarinsurance.ca? Chances are, the driver that you're watching is carrying more personal injury insurance than you could ever even have imagined possible. When you think about their profession and the associated risk for injury, this only makes sense. With that being said, there are probably a lot of things about this type of coverage that will surprise you.
What's Really Covered in Such a Policy?
This is not exactly your run-of-the-mill type of coverage. It's sort of like everything rolled into one. It's designed to pay medical expenses as well as any and all wages lost during the time that the driver is incapacitated. It also provides death benefits. It's really not medical insurance, nor is it life insurance. Just as previously discussed in the first paragraph, it is personal injury insurance that's specifically designed for people in high-risk professions, such as automobile racing. As you might have already guessed, this type of coverage isn't exactly cheap, but neither are the payouts. When you consider the likelihood that a driver will suffer some type of injury over the course of their career, it's understandable that this type of coverage is going to cost a lot more than your everyday policy. What might surprise you more is that most drivers are paying for these policies out of their own pockets.
Why do Drivers Pay for Their Own Policies?
In short, it comes down to the fact that more often than not, race drivers are considered to be independent contractors. Even though they are associated with a specific team, they're not technically considered to be employed by that team under most cases. Even if a driver has been racing for the same team for several years, they're still not considered an employee. Pit crews and everyone else involved in race day activities are considered to be employees of the team in question, but drivers always have the option of signing a contract with a new team. Therefore, they're considered to be independent contractors. This technically means that they're self-employed so if they want insurance, they're going to have to purchase it themselves. It's a very rare occasion that any team offers to pay for even a small portion of the insurance premiums. If it does happen, it's usually because it involves a driver that's in exceptionally high demand who requires it as part of the contract before he's willing to sign it and drive for a specific team.
How is the Typical Automobile Racing Policy Formulated?
Just like virtually any other type of insurance policy, there are a lot of factors that determine how much coverage will be provided and how much it's going to cost. In almost every case, the insurance company will consider the number of races that a driver participates in on an annual basis, as well as the specific type of racing that he or she is involved in. In addition, the type of race car is considered, as are the speeds of that particular car. Of course, there are several additional factors that are unique to each policy. In short, it takes an experienced company that knows how to provide policies that are far beyond the realm of a typical insurance policy, whether that refers to health, life or automobile insurance. As a direct result, the companies that provide this type of coverage typically do so for a number of individuals involved in the sport.
Payouts
You might be wondering how much a policy of this type could potentially pay if the worst were to happen and a driver was involved in a serious accident. All you really need to do is look at automobile racing history. In some of the most serious accidents that have occurred in the past, payouts have been as high as $100,000 per day. Remember, it's all about paying for medical expenses. Injuries that are incurred in an auto racing accident are typically extremely severe. Therefore, the associated medical expenses can skyrocket in no time. In addition, these policies don't typically pay a portion of the medical expenses. Instead, they pay all medical expenses plus lost wages. In one case, a driver received just over $100,000 per day and was out of action for a little over three months. He received that pay out daily for the duration of time that he was unable to get into a race car.
Cost
Obviously, any policy that offers these types of high dollar payouts are going to come with equally expensive premiums. The truth is, premium for an insurance policy like this can vary a great deal. It's because of all of the factors that go into deciding the cost of a premium to begin with. Drivers that race automobiles that travel at slower speeds or that are deemed to offer more protection due to their overall design can usually expect to pay at least $3,000 a month for this insurance. On the opposite end of the spectrum, the driver that received the payout in the neighborhood of $100,000 per day was reported to have spent $300,000 per month on his insurance policy. That sounds like it would be far too much to spend on any insurance policy, but when it was all said and done, that same policy paid out over one million dollars to cover his medical expenses and ensure that he had income until he could drive again.
Is it Worth It?
If you choose to drive professionally, you almost have to have this type of policy. Otherwise, you're not only putting your health at risk, but also your finances. It's important to remember that a typical insurance policy is not going to pay for engaging in high-risk behavior, and automobile racing certainly falls under that category. That's why you need a specialized personal injury insurance policy.
When it's all said and done, most auto racing drivers wouldn't dream of doing anything else for a living. At the same time, they also realize that there is a certain amount of inherent danger involved in what they choose to do. That's why they're more than willing to pay for these types of insurance policies themselves. The more popular and the more successful they become, the easier it is for them to negotiate a contract that pays them enough money to cover the cost of these types of policies without eating into their bank account.
