How Does F1 Race Car Insurance Work?


Formula 1 racing demands a lot of skill and equipment, contributing to the significant spending involved in the sport. As reported by Essentially Sports on F1 racing, the three biggest teams – Mercedes, Ferrari, and Red Bull Racing – have spent over $400 million a year on their teams.

To combat any advantages incurred by their big budgets, F1 introduced a budget cap for 2021 at $145 million, dropping to $135 million by 2023. Although these are large budgets, funding for the actual race car can get very expensive as teams design, test, and use their vehicles on the race track.

Considering how racing is a high risk, standard car insurance policies often don’t cover any associated damages. Instead, organisations get car insurance from companies specialising in the motorsport niche market.

Why get race car insurance?

Race car insurance is an essential type of auto insurance for those driving high-speed vehicles. Some race cars are designed for speed and precision, so their design and manufacturing are usually more expensive than typical cars. Furthermore, not only are the race cars capable of speeding and potentially crashing or flipping over, but the news on Ferrari’s Sainz recent car accident also highlights how even engine failures and fires can happen. Many professionals choose to get race car insurance to protect themselves from additional costs.

How does it differ from standard auto insurance?

Depending on the insurance provider, high-performance cars may have certain limitations compared to normal ones. These vehicles usually have insurance thresholds that can go as low as $40,000 to $60,000, which may not be enough to cover expensive parts. Furthermore, some companies may also have a specific list of uninsurable cars that will only be offered liability insurance and doesn’t provide comprehensive or collision coverage.

In some countries like the US, risky drivers are even required to have an SR-22 form to prove that they carry the required minimum car insurance. A writeup from SoundDollar on the SR-22 insurance notes how you’ll need to pay a one-time filing fee for this form, and your car insurance will likely go up 50% to 200%.

Aside from keeping a copy of your SR-22 in your car, it’s crucial that you follow other state requirements and also stay mindful of other traffic laws. According to CNBC on traffic violations, traffic violations contribute to bigger insurance costs on top of your already expensive insurance. It’s important to note that these requirements are usually associated with ordinary drivers or amateur racers, and the system may differ for professional athletes who drive as a sport.

Benefits of race car insurance

Depending on your race car and profession, there are different insurance coverages and benefits. Here are some coverages race car insurances may provide:

Personal accident – For a higher premium, insurers may protect race car drivers from significant costs stemming from medical bills, as well as financial protection from a career suspension or premature end due to an injury.

Event cancellation – Considering how some professional race cars can’t be driven normally on regular roads, there is often a logistical challenge involved in preparing for a race event. Policies may also protect vehicles from issues off-track such as theft.

Physical damage – As mentioned earlier, race cars are often prone to physical damage due to the high-speed nature of racing. You may need to find special insurers that cover costs to repair or replace damaged vehicles following an accident or fire.

John Smith
John Smith
Editor at and all round Motorsport journalist specialising in Formula 1, IndyCar and Formula E.
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