It isn’t uncommon in NASCAR to see cars ruined out of life by wrecks and crashes. With the cost of building a car reaching six-figure amounts, such accidents can heavily offset the finances of a team. While it would make sense for teams to have their cars insured under such pressure, they don’t do so. Joe Gibbs Racing president Dave Alpern explains why.
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In a recent video, he revealed, “We don’t buy cars. We buy parts and pieces to put the car together. So, you can imagine the insurance policy on a race car would be more expensive than the car itself because there’s a good chance that the car is going to get wrecked.”
Alpern continued to underline that the cost of repairs and replacements falls completely on the race team. He said, “When a car wrecks, it is on us.” Though there are insurance policies that do cover the organization as a whole, there aren’t any for the individual race car.
Insurance policies are typically drawn out for damages incurred because of “accidents”. In stock car racing, it is natural to see deliberate nudges and pushes that cause huge physical damage to the car. Understanding the sport’s character it is quite obvious to see why the regular insurance carrier might think twice about providing services to NASCAR teams.
Do NASCAR teams provide insurance for their drivers?
Unlike crew members and technicians in the race shop, NASCAR drivers aren’t employees of the team that they drive for. They run in the capacity of independent contractors and for this reason, the teams don’t provide insurance coverage for them. However, the drivers do take out their own insurance policies for protection.
Former racer Kenny Wallace put up a tweet about this last year and mentioned that he’d spent up to $150,000 a year on insurance alone in his heyday. Going further, he explained that the policy fee lay directly proportional to the expenses that each driver made for running a race.
He wrote, “There were times I spent as much as $150 THOUSAND a year or more on racing Insurance. The more expenses a driver has. (Bus-Plane-Loans-employees etc. The more insurance he or she will need. ITS REAL LIFE”
To drive the race car in @NASCAR . I had Disability Insurance and workman’s comp.
Plus my normal family health insurance and auto insurance and golf cart insurance (Required by the race tracks) .
There were times I spent as much as $150 THOUSAND a year or more on racing… https://t.co/LK3behkpbx
— Kenny Wallace (@Kenny_Wallace) December 22, 2023
The cost of insurance also factors in other variables such as driver age, character, and previous crashes. Companies like Nationwide and Geico vie for deals with top stars for the publicity that it gets them.
