by familiar1985 » Tue May 11, 2010 09:05 am
I have a car on which i still owe 18k to the bank. I have converted it into a race car so it will never be used on the street in its lifetime. All that is left from original is the chassis and engine. My problem is that im still paying insurance. How can i cancel the insurance? Anyway to explain to the banks the car i purchased from them is a chassis and an engine that will never be on the streets?
Posted: Fri May 14, 2010 04:52 pm Post Subject:
[My insurance company is fine with the car the way it is. I'm not sure what turns car into race car on paper that makes it illegal but aside from exhaust everything else is street legal[/quote]I'm referring to racing the car... not the modification. if someone told you the insurance company is fine with you racing the vehicle... they either have their head up their butt or were flat out lying. Trust me... if the underwriters of the insurance company were told someone was racing a vehicle, they would non-renew the policy... no questions asked.
There are issues other then not providing coverage for racing. If you kill someone one while racing you will probably be sued. You will then ask your carrier to provide a defense. They will spend a lot of money determining what to do. After you loose the lawsuit an attorney will help you file a bad faith claim against the carrier for denying coverage. What I'm saying is that these things happen _every day_... the insurance company rightfully denies the claim but then they need to spend hundreds of thousands of dollars defending themselves. As such, it's _much_ easier to just non-renew the policy. It's one policy among thousands.
Posted: Fri May 14, 2010 05:04 pm Post Subject:
"There are issues other then not providing coverage for racing. If you kill someone one while racing you will probably be sued. You will then ask your carrier to provide a defense. They will spend a lot of money determining what to do. After you loose the lawsuit an attorney will help you file a bad faith claim against the carrier for denying coverage. What I'm saying is that these things happen _every day_... the insurance company rightfully denies the claim but then they need to spend hundreds of thousands of dollars defending themselves. As such, it's _much_ easier to just non-renew the policy. It's one policy among thousands."
I think you might have a wrong opinion about what is meant by racing and how it works in reality. Maybe i should have been more specific.
I do not mean street racing. Nothing illegal. Racing is on private property. Think of it as driving around in your backyard with a couple friends. Also you are not responsible to cover other people's damages. If you get in an accident you do not cover other peoples car or health regardless of whos fault it is. There are waivers you sign.
Posted: Fri May 14, 2010 05:13 pm Post Subject:
There is no need to be so specific about a lot of this.
I appreciate everyones concern and comments. They have helped a great amount. I will look into getting storage insurance or the comprehensive coverage.
Posted: Fri May 14, 2010 05:14 pm Post Subject:
There are waivers you sign.
I hear you. I've been around the block a few times. You get a large enough pot of gold and anyone will chase the end of the rainbow.A "waiver" does not mean no lawsuit. Walking into court is always a roll of the dice. But on top of that, just walking into court is expensive. I can't tell you the amount of money I've seen fly out of the door to defend cases where their was no coverage. The issue is if it's worth $2000 in premium to spend $100,000 to get out of a bad situation. Better for the carrier to move on to the other thousands of policies without that type of risk.
I'm not saying that the racing you are doing is not as safe as it could be.
Posted: Fri May 14, 2010 05:48 pm Post Subject:
tell me about it. The legal system is horrible. I can go on forever on that note though id rather not.
The waivers are actually tried and proven for the most. Its complex many organizations with different rules. Nobody sues anyone for on track damage where i plan to race. It is also very safe. Insurance is more so used when a driver does not own the car. Then the car owner can make him get insurance as the car can be worth well over 200k.
When you see a nascar guy clip his arch enemy and send him flying into the wall and total his 300k race car he does not pay for damages. Then again this is why racing is expensive. Also why owner of car/team might require driver to get insurance. Also why his enemy is trying to slap him up after the race. If you cant take the financial burden of your car being totaled you have no business on the track.
Posted: Fri May 14, 2010 06:36 pm Post Subject: Collector Car Coverage
There is a possibility the changes could qualify your vehicle for collector type coverage. My agencies insure a variety of collector, antique and high valued vehicles. If any questions exist shoot me a message.
John
Posted: Fri May 14, 2010 07:05 pm Post Subject:
I do not mean street racing. Nothing illegal. Racing is on private property.
I've been clear as far as this goes from the beginning. Clarifying that the vehicle is "street legal" helps a tiny bit. Except . . .
but aside from exhaust everything else is street legal
The vehicle is either "street legal" or it is not. If one item takes it out of the definition of streel legal it is not. If the bank repossesses and the bank president decided to take it for a spin around town, he'd get a citation and the police might even have the authority to impound the vehicle in its condition.
But none of that changes the facts of your situation. The lender did not give you a loan to create a race car. Had it known your intentions, it would most certainly would have taken a pass.
In one of your earlier posts you wrote:
What i meant by the car is a chassis and an engine is that those are the only original parts that the bank owns left. Everything else is owned by me and my partner.
The bank is not concerned with physical ownership, even though they are on title as "Legal Owner" -- legal owner means "first right to possess" -- because you owe them money, pure and simple. They just want to be assured the will get their money back one way or another.
Banks loan money on tractors, cows, corn and other crops, not with the expectation of driving, milking, or eating anything, but solely with the expectation of getting back 100% of their money + interest. Those same items can be insured so that if they are lost, the insurance company will pay what's owed to the lender, wiping the slate clean, rather than the farmer having to come up with his own funds to do so.
As tcope said, you THINK all the aftermarket parts now attached to the vehicle are YOURS AND YOUR PARTNER'S and that they make the vehicle worth $40,000+. But if the lender repossesses the car in the dead of night, when you're not around to defend it, those items attached to the vehicle go with the vehicle, because the vehicle, in whatever condition, is the lender's security interest.
I would be willing to bet, that if you had 8 hours advance notice of a repossession, you and your partner would strip every last "part we own" off the vehicle leaving only the engine and chassis that the bank owns. Right?
That, as we've tried to explain, is not going to be worth $18,000, and why you've rendered the vehicle's value down to $0 AS THE SECURITY INTEREST of the loan -- it is not about the parts. And it's the reason the lender could demand acceleration of the loan, or repossess the vehicle in the next hour without notice to you. It doesn't mean they will. Some banks are willing to negotiate.
The flaw has always been in your reasoning. None of your theories of ownership, insurability, or self-insurance have been correct. And that's what is putting you at odds with the lender and their legitimate right to demand collision & other than collision coverage on the vehicle -- none of which will apply when you are racing the vehicle on private property, public streets, or in your dreams.
And it's putting you at odds with those of us who know and understand what you think you ought to be able to do, and we're trying to show you that you're wrong. Graciously.
You are in a nearly impossible situation. An $18,000 check to the lender will eliminate all of your concerns and objections and what-ifs. If you have it available, write the check.
Posted: Fri May 14, 2010 08:55 pm Post Subject:
Relax, lol. Am i not clear. I allready told you bank thinks car is worth 40k+ not 0. I am on good standings with them. Everything is fine. I can go on for 2 years paying my insurance and bank. I verified with the bank and insurance. Im trying to figure out how to make insurance cheaper since its not necessary as car is sitting doing nothing.
That stuff about them repossesing car in the middle of the night when im not protecting it is really hilarious. Why are you telling me that? Bank would never try to do that to account making payments every month in good standing. Thats just ridiculous.
Seems the words "race car" gets you insurance guys all fired up :)
I think it would have been easier for me to get information if i didnt say it is a race car and go into details. Forget i ever said its a race car. Its a street car. Fully street legal with street legal exhaust and i plan to store it for 2 years or put it on display. Whats the best insurance for a normal street vehicle that will not be driven?
Posted: Fri May 14, 2010 09:26 pm Post Subject:
Why are you telling me that? Bank would never try to do that to account making payments every month in good standing. Thats just ridiculous
That is not the point... if every borrower was asked if they were going to make payments, they would all say yes. The point is that the bank is going to require that coverage and why.Whats the best insurance for a normal street vehicle that will not be driven?
All of that is mentioned above. If you turn in the tag then you don't need liability coverage. But it may be cheaper to obtain a personal auto policy, with minimum liability limits.Posted: Fri May 14, 2010 10:23 pm Post Subject:
Forget i ever said its a race car. Its a street car. Fully street legal with street legal exhaust and i plan to store it for 2 years or put it on display. Whats the best insurance for a normal street vehicle that will not be driven?
OK, forgotten. Just apply for a minimum liability policy with collision and comprehensive coverage. Choose whichever insurance company has the funniest commercials or cutest models or best music.
Just remember, however, if the vehicle is stolen, damaged, or otherwise subject to a claim, if you told the insurer that it is "street legal", not modified in any manner contrary to the requirements of the policy, and they issued a policy without an inspection, but later discover that you misrepresented the nature or condition of the vehicle in the application, your coverage will be rescinded, meaning no insurance.
Seems the words "race car" gets you insurance guys all fired up
Well, if you go back and read your original post, wind your way through the thread, and recognize how you misrepresented (maybe that insurance company lawyer word is too harsh, let's just say "obscured") the facts initially, you'll find that the three or four of us who have been involved in this dialogue have all approached things with your best interest at heart. You wouldn't want an insurance agent who didn't.
We've tried to give you the best guidance we could with the information we had. Agents run up against this all the time. Clients (try to) hide material information -- like driving 30,000 miles per year, because they know it affects the cost of insurance. But doing so only leads to problems at the worst possible moment -- when the insured suffers a loss. When they discover that they also have no coverage because they lied on the application, it leaves them and often other parties hanging out to dry.
I try to be as honest with my clients as possible, and expect the same in return. It has to be a two-way street.
You would be ill-advised to represent your vehicle to an insurance company as "street legal" or "stock" if, in reality, neither of those terms applies 100%.
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