Flow Racers is a reader-supported site. Purchases made through links may earn a commission.

Do F1 Cars Have Insurance? Do The Drivers?

Since Formula 1 cars are so expensive and prone to damage in a race, there needs to be a way for teams to repair their cars quickly and easily. As the cars are so expensive to make, it’s no surprise that many fans may wonder if F1 cars do have insurance.

F1 cars do have insurance when they are traveling to and from different events. On-track incidents and mechanical failures are covered by the team and their sponsors. This is because there is a fairly high chance the car will be damaged on track, so most insurers wouldn’t take the risk.

Formula 1 teams will include a crash damage section in their budget. This allows them to plan for potential damage to their cars and how they’re going to fix it. Below, we take a closer look at the idea of insuring an F1 car, and we discuss whether or not the drivers have insurance as well.

Are F1 Cars Insured?

F1 cars are insured when they are traveling between events, but not when they are racing on the track. This is because it would be far too expensive for insurance companies to take the risk of insuring an F1 car during a race, and the premiums paid by the teams would be extortionate too.

Formula 1 is a competitive sport where the cars are often racing wheel to wheel at incredible speeds. This can naturally lead to incidents and heavy crashes, with the chances of at least one car being slightly or majorly damaged during a race being very high.

Because of the facts that Formula 1 cars are so fragile and that they race so closely during a Grand Prix, many people may believe that Formula 1 cars are insured by a third party. However, this is not the case in modern Formula 1.

When F1 Cars Are Insured

Formula 1 teams do not take out insurance on their cars for anything that happens to them during an event. However, they do have insurance on their cars and equipment when it comes to transporting everything between events.

The cars are also insured against unexpected events outside of the team’s control, such as theft, vandalism, flooding, etc. These are not common occurrences, so the costs of acquiring this type of insurance for a Formula 1 car are much lower than insurance against damage.

Finally, the teams will also have liability coverage. This is in the event that an incident occurs where a spectator is injured or killed, in which case the team is protected from any legal action. While this used to be common in the past, Formula 1 circuits are so safe nowadays that it is highly unlikely to ever happen again.

Why Are Formula 1 Cars Not Insured?

Formula 1 cars are not insured for events as it would end up costing the teams too much money throughout the season. Due to the high risks involved in Formula 1, the insurance costs would simply be too high. Aside from that, most insurance companies would not agree to it anyway.

Formula 1 teams also produce their own spare parts, making insurance less necessary as the cost of damage is factored in at the start of the season. Teams usually build enough spare parts at the start of the season to replace damaged and worn-out parts. Parts that are replaced can be recycled in order to build new parts.

This allows a team to keep their costs down throughout the season. It also means that teams can usually repair damaged cars at any time and at any event, provided the damage isn’t terminal during a session. However, there is still a huge amount of money that is put into producing spare parts for the cars.

How Expensive Is F1 Insurance?

Insuring a Formula 1 car is incredibly expensive due to the high risks involved with the cars racing wheel to wheel at over 190 miles per hour. Damage is common in Formula 1, so an insurance company is almost guaranteed to have to pay out to a team throughout the season, which means it’s just not worth it for them.

However, the cars are insured for any incidents that are out of their control. This would include any incidents that are away from the circuit, such as when the cars are being transported to their next destination. This type of insurance is much cheaper as the cars are far less likely to get damaged in transit versus on the track.

Formula 1 teams are also very careful with their cars, and they will always ensure that the cars are stored and transported safely. This helps to reduce the cost of their insurance as there is much less risk involved in covering the teams for this.

Is There A Risk To A Formula 1 Team’s Equipment While Traveling?

When it comes to transporting expensive high-performance machinery there is always some risk involved. The risk of the cars being damaged is significantly lower than if they were out on track racing against other cars of course, but it’s still there.

Formula 1 cars are transported using enclosed trucks on public roads. When the race is overseas or on a different continent the team’s equipment and cars and neatly packed up and flown in a cargo plane or shipped to their next destination.

When the cars are being transported they are always neatly and securely packaged, meaning they are less likely to be damaged. However, there is always a slight risk of something happening, such as a truck being involved in an accident on the road, or one of the cars being damaged in the transport process, which is why insurance is necessary for Formula 1 teams between events.

Who Pays For F1 Crashes?

F1 teams pay for F1 crashes that happen out on track. It would be far too expensive to get insurance to cover on-track incidents, so the teams budget in damage costs at the start of the season, and create spare parts to be used in the event of a crash.

When a Formula 1 car crashes while it’s out on track, someone needs to pay for the damage and for the spare parts that need to be put on the car. Since the teams do not have insurance that covers on-track activities, the team has to pay for the damage to their cars.

Sponsors And Pay Drivers

Formula 1 teams have massive budgets with sponsors that pay them huge amounts of money in exchange for publicity and a whole range of perks. Some teams may also have pay drivers, which are drivers that bring money themselves to the team in order to race.

Drivers will often have their own sponsors as well, such as CarNext in Max Verstappen’s case. All of these funds add to the budget that a Formula 1 team has available to them throughout the season.

How Expensive Are Crashes In F1?

The expenses that a Formula 1 team will need to pay for a crash vary depending on the severity of the damage that is done to the car. For example, a huge impact, such as the one that Verstappen experienced at the 2021 British Grand Prix, can require a whole car rebuild. This may cost the team several million dollars.

In some cases, multiple parts may be damaged, including the bodywork, suspension, chassis, gearbox, and engine. This could easily cost a team well over a million dollars to fix as well. These high-impact crashes are not uncommon in Formula 1.

However, what’s more common are the little bumps and shunts that cause damage to the cars throughout the race. These might not be as severe, but they can easily add up over the course of a season. Small bits of bodywork that fall off the car when it goes over a big bump or touches another car can easily cost tens of thousands of dollars.

How Much Does Damage Cost A Team Over A Season?

Formula 1 cars are often involved in accidents, even if it’s nothing severe and it’s just a couple of bumps through the first corner. It’s very unlikely for a team to avoid any damage costs over the course of an F1 season.

In 2021, the highest repair account of all drivers belonged to Mick Schumacher and his Haas crew, with just over $4 million in damage that was caused to the car throughout the season. This damage had to be paid for by the team and Schumacher’s sponsors.

Most of this damage came from big crashes such as the one that he had during qualifying at the French Grand Prix. However, the small incidents throughout the season certainly added up as well. The average cost of damage in a season is much lower, and it depends on whether the damage done to the car was severe or not.

What Happens If A Car Has A Mechanical Failure?

Mechanical failures on the cars also need to be paid for by the team. Formula 1 cars use several high-performance parts, which can fail over time. Although modern Formula 1 cars have become much more reliable, we still see devastating mechanical failures from time to time.

Does The F1 Budget Cap Include Damages?

The F1 budget cap does include damages. This means teams must factor in potential damage costs when developing and building their cars. This could potentially mean that damage during a season could hamper development for the following season.

Strict budget caps have been introduced into the sport in order to bring the costs down. This has been done to level the playing field and prevent the top teams from spending huge amounts of money that the smaller teams are not able to do.

However, crash damage is included in the $140 million budget gap. This has already caused tension among some teams. At the Hungarian Grand Prix in 2021, Valtteri Bottas was at fault for causing a massive collision at turn one, causing severe damage to one of the Ferraris.

Ferrari team boss Mattia Binotto appealed to the FIA stating that it is unfair that they have to pay out of their budget for a crash caused by another driver. This has never been a major problem until the budget caps came in. However, it seems as though the rules will remain the same in the future, and all teams must fit the damage repair costs of their own cars into their budget for the season.

Do F1 Drivers Have Life Insurance?

F1 drivers do have life insurance. Driving their cars on their limits poses a lot of risks, and considering the history of the sport and the number of driver deaths and injuries we have seen in the past, drivers do need to be insured.

However, the safety of the sport has dramatically increased over the past few years. With the introduction of the halo, we have seen a lot of progress being made, and we have seen a lot of lives saved.

Most Formula 1 drivers have families as well, and it’s important that their families are taken care of in the event that something happens to them. Formula 1 drivers will have their own personal life insurance, rather than it being supplied by the team.

Final Thoughts

Formula 1 cars are not insured for any damage that is caused to them while they are out on track. This is because there are huge risks involved in Formula 1, and a car sustaining damage is not uncommon. F1 cars are insured when they travel though, where less risk is involved.