What floats your boat?
Classic car specialist Hagerty traces its roots to a collector boat program
By Elisabeth Boone, CPCU
“There is nothing — absolutely nothing — half so much worth doing as simply messing about in boats.”
That emphatic declaration, uttered by Ratty to Mole in the children’s classic The Wind in the Willows, aptly expresses the feelings of boat owners from the Atlantic to the Pacific and all the waterways in between.
For those whose passion is messing about in boats, a key concern is protecting their investment from the numerous hazards to which watercraft are exposed—especially the antique and classic craft that are costly to repair and often impossible to replace.
For coverage and service that are specifically tailored to their needs, many owners of collectible watercraft turn to the experts at Hagerty, a leading agency for collector boats and cars.
Based in Traverse City, Michigan, Hagerty was established by Frank and Louise Hagerty in 1956 as a general lines agency. When they weren’t busy selling and servicing insurance, the Hagertys could reliably be found—you guessed it—messing about in boats. When they were unable to find insurance for Pipe Dream, their small wooden boat, they decided to combine their passion for classic watercraft with their insurance knowledge, and in 1984 they sold the general lines agency and launched Hagerty Classic Marine Insurance Agency.
As the first agency to offer agreed value coverage for wooden and classic boats, Hagerty quickly became a go-to market for this hard-to-find protection. Based on their success, in 1991 the Hagertys introduced specialty insurance for the owners of collector cars, also written on an agreed value basis. (See “A Classical Gas” in the April 2003 issue of Rough Notes.)
With classic cars, boats, and insurance in their DNA, it was almost inevitable that Kim and McKeel Hagerty, two of Frank and Louise’s three children, would follow their parents into the family business. Today Kim and McKeel serve as co-chief executive officers.
For love of boats
His agency, McKeel Hagerty says, believes that collector boat owners are among the safest, most conscientious boaters on the water. As such, he explains, the agency is committed to offering these enthusiasts comprehen-sive, affordable coverage and access to a range of resources and benefits.
“Insuring boats is really the heritage of Hagerty,” he comments. “When my parents began offering wooden boat insurance, nobody would insure these craft. My parents were in love with boats, and they knew the care lavished on them by the owners, as collectors and restorers, was such that there had to be a way to create an insurance product for them. We’ve been in this business for 25 years, and we’re still the dominant player in the market,” he says.
Hagerty’s policy covers almost any kind of wooden boat that is in good to excellent condition. In addition to production wooden boats, the agency offers coverage for excellent reproductions of classic wooden boat designs and for high-quality classic non-wooden boats that are at least 12 years old, 18 feet or longer, $10,000 or more in value, and have a top speed of 45 mph or less. Eligible craft include home-built or kit wooden boats, most cruisers and trawlers, mono-hulled sailboats, wooden canoes, runabouts, utilities, launches, and skiffs.
“The most popular collector boats tend to be inland lake power boats like ChrisCraft and Century,” Hagerty remarks. “As with hot rod cars, we’re seeing a new industry emerging: the creation of custom power boats. For example, a manufacturer like Hinckley uses a classic picnic boat design to build new boats. Some companies are custom building high-performance wooden boats with huge, powerful motors that look like vintage craft. They’re beautiful,” Hagerty says, “and they’re not cheap.”
Hagerty’s wooden boat policy provides coverage for unlimited navigation and overland transportation within the United States and Canada, with no mandatory winter lay-up period. A port risk policy is available for boats that are under restoration, whether by the owner or a professional facility. The agency also has a specialty product that provides coverage while a vessel is in transit overseas. Hagerty’s collector boat coverage is underwritten by two A- rated carriers: the One Beacon Group Companies and the Encompass Insurance Companies.
Not surprisingly, Hagerty says, “We’re looking at expanding our policy to cover vintage fiberglass boats, which tends to make my father cringe. Before the first oil embargo, some very fine fiberglass boats were built in the 1960s. They’re now considered vintage watercraft, and they’re not eligible for any standard marine insurance programs out there. We’ve been working hard to deliver a solution through our agency distribution network.”
What’s hot in wheels?
As in the worlds of art and fashion, trends in collector cars and boats are always subject to change. For the specialists at Hagerty, that means keeping their finger on the pulse of their markets, and creating new products and services to meet their clients’ needs. We asked McKeel Hagerty about changes in the collector car market, and how his agency is responding to emerging trends in its markets.
“A lot has changed over the past five years,” Hagerty says. “We’ve grown a lot, and we’ve definitely been the beneficiary of the tremendous growth in the car hobby in the U.S. It’s a combination of a lot more automotive programming on television, the type of advertising that is targeted at baby boomers, and the kinds of hobbies and activities that boomers are into.
“We’re seeing a great deal of interest in muscle cars in particular, and overall the car hobby has just exploded in popular culture,” Hagerty observes. “You can open a magazine like Forbes and see an ad that asks, ‘How do you want to spend your retirement?’ showing a couple riding in their vintage Mustang or Corvette. Whether it’s retirement planning or cholesterol medicine, cars have become the background against which advertising targeted to baby boomers is presented.”
Pointing to another boomer trend, Hagerty says, “We’re seeing a rapid rise in hot rodding and customizing cars. Some manufacturers are producing brand-new hot rods that are valued at $250,000 all the way up to $1 million or more,” he notes. “This is an area that, from an insurance and underwriting standpoint, is a lot more complicated because of the need to scrutinize each risk individually. We can use our knowledge and experience to be of service to agents and their customers.”
His agency, Hagerty says, is riding the wave of these emerging trends. “In the last five years we’ve grown from 150 employees to almost 400, and we’ve been at the vanguard of delivering specialty insurance for collector cars in all of their forms.”
He continues, “In addition to enhancing our coverage, we’ve expanded the channels through which we help agents, companies, and insureds manage these exposures. We’ve taken what is generally a difficult line of business for the typical agent and have made it very easy for that agent to deal with us. We’ve opened an international office in London where we write coverage for cars going to and from Europe and around the world. We’ve also launched a finance program for car collectors.”
For insureds, the agency offers Hagerty Plus, an information resource and advocacy center for the owners of collector cars. Through the Hagerty Collector Car Network, insureds can communicate with each other; they also can access a database that provides links to antique car clubs, collector car and exotic car dealerships, auto museums, appraisers, specialty vehicle transporters, industry parts suppliers, and restoration and repair shops. Hagerty acts as a clearinghouse for this information and does not endorse the providers it lists.
Whether it’s a 1932 Ford coupe that’s lovingly polished and driven by a beaming boomer, or a sleek wood ChrisCraft speeding across a tranquil lake, it’s clear that Americans’ love affair with vintage autos and watercraft is only growing stronger. The seasoned professionals at the Hagerty agency are just as passionate about these treasures as the customers they serve. Just ask McKeel Hagerty: He still owns the Porsche 911S he bought at age 14 and meticulously restored with the help of his father.
For more information:
Hagerty Insurance
Web site: www.hagerty.com