Formula One racers protect themselves
May 1, 2012 1 minute read
If ever you’ve thought auto insurance was expensive, have you considered how much coverage a race car driver might need?
It’s generally speculated that the top Formula One drivers have up to $80 million in personal injury coverage – and usually they pay for their own insurance.
In this high-risk sport, payouts cover medical expenses in the event of injury, as well as compensation for lost income. Death benefits are also considered.
After Michael Schumacher crashed in the British Grand Prix in 1999, he was reported by media to have the “most expensive broken leg in history.” One newspaper claimed he was receiving 65,000 pounds ($105,000) a day from his insurance company, with daily payments to continue until he returned to the track. It was estimated he received around four million pounds ($6.4 million) during his 98-day absence.
And how much did Schumacher pay upfront for this coverage? Insurance agent Wolfgang Druschky was quoted as saying he had paid 200,000 pounds ($318,000) each month.
In Formula One racing, thumbs are worth a lot. Ferrari title sponsor Santander insured Fernando Alonso’s digits for nine million pounds ($14 million) in 2010, as part of a life and accident insurance package. A Santander spokesperson explained: “Alonso’s thumbs are a big symbol as, apart from being essential when driving a Formula One car, they represent a sign of victory and that everything is under control and well protected.”
In the worlds of IndyCar and NASCAR, drivers are considered independent contractors, so they take out their own insurance policies. It usually costs a few thousand dollars for $1 million coverage. Risk is assessed on the number of races they participate in, the speeds they drive at, and the types of cars driven. Racing teams take out insurance to cover employees, such as pit crew members who run the risk of being struck by a flying tire. NASCAR tracks also carry $50 million coverage for spectator injury, property damage, legal liability, etc.
When the first Grand Prix in India was held in October last year, organizer JPSI sought coverage of $100 million – $15 million for event cancellation coverage, and $85 million for terrorism and third-party liability coverage (e.g. personal accident for ground crews, property damage).