Racing driver ordered to repay $70,000
An American drag car racer has been forced to pay back $70,000 to a Bermudian-based insurance company for misrepresenting the top speed of his vehicle.
Mark Woodruff told the insurer his car could not complete a 220-yard course in less than 4.2 seconds.
Mr Woodruff received a payout after a crash, but the insurer discovered he had made multiple runs with times below 4.0 seconds and company policy prohibited insurance cover for vehicles that could travel that fast.
The Supreme Court heard that Motor Insurance Group, which is operated by Bermudian-registered Capital Securities Ltd, based premiums on the “elapsed time” of a racing car — the time from start to finish over a track — and would not insure cars with an elapsed time of 4.2 seconds or faster.
Acting Puisne Judge Shade Subair found that it was clear from the evidence that Mr Woodruff knew the vehicle exceeded the maximum allowed elapsed time.
She wrote: “I was further persuaded on the evidence that the first $35,000 advancement by the insurer was made in good faith and prior to any discovery by the plaintiff that the defendant had misrepresented the true elapsed capacity of his vehicle.
“This amounted to a payment by mistake as the plaintiff was mistaken on the material facts which led to the payment.”
The hearing was held in the Supreme Court on April 16, but Mr Woodruff was not present or represented by counsel.
The Supreme Court heard that Mr Woodruff had applied for insurance from the company in 2015 and 2016, with the second policy ending in March 2017.
On August 24, 2016, Mr Woodruff was involved in a crash. The next day he filed a claim seeking $85,365.51.
Capital Securities said the claim technically fell short of compliance, but the company decided to process the claim in good faith.
A payment of $35,000 was sent to Mr Woodruff by wire transfer, but it was discovered he had started to get the vehicle repaired without first getting an estimate, which was contrary to his policy.
The insurer then discovered multiple videos and postings online of Mr Woodruff making 220-yard runs in less than 4.0 seconds.
The company demanded the money be returned, but no payments were made.
The court also heard that a power outage in Bermuda in September 2017 caused by Hurricane Irma accidentally led to a second payment of $35,000 to be paid to Mr Woodruff.
A witness explained that staff made the error while trying to work through the adverse conditions.
The court heard that the combined $70,000 sent to Mr Woodruff was more than he would have been entitled to even if the vehicle was eligible for coverage.
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