NGT Insurance Interesting Math


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timcantwell

Le Mans 2010 Sponsor * Moderator
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Jan 22, 2006
2,634
N.E. OH & Naples, FL
Many have asked about, posted and commented on the subject of insuring your New GT. I know that many factors are considered when calculating a premium rate for a car such as the NGT. I thought it would be interesting to some of you to read some email exchanges I had with my insurance carrier relating to the addition of my 2018 NGT to my policy. As a matter of background, my collector cars (about two dozen total) are all covered by a specialty collector contract. So the background is that Pat Milliken Ford required a proof of insurance card that showed the VIN on the day my NGT was delivered. As I typically do, I emailed my buyer's order showing the purchase price to my insurance agent to bind coverage. So the initial policy basically covered the net sale price. My policy includes a 150% (Max) market appreciation clause that would allow my car to be valued at 150% of the initial purchase price of the car. So read my email exchanges below and see where I ended up with my premium and values assigned to the NGT.

AGENT EMAIL TO ME:

Good morning Mr. Cantwell,

The underwriter from (Name removed) has contacted me regarding the addition of the 2018 Ford GT. According to The underwriter the value [on the NGT] has nearly tripled and are in the $1.5-$1.6 million range (given the low production figures, the exclusivity and the fact that Ford has fallen behind on the planned production. With that being said, we have two options. We can add the vehicle at $1.5 million and be all set, or we can add it for the original sale price but would not include the 150% market appreciation or diminished value. Please let me know, or feel free to give me a call to discuss further.

MY RESPONSE AND QUESTIONS:

Thanks for watching out for my best interests. The underwriter is correct, although there is much more background information behind his comments. I am intimately aware of the where the market values on these cars have gone, however, I have in-depth personal knowledge regarding the secondary market sales. You are correct that production is behind and it is very limited. Only two cars have been known to be sold to-date on the secondary market, one for around $1.5 Million, another for an undisclosed sum. The subject of these secondary market sales has been in the news and each sale has been aggressively litigated by Ford as the Plaintiff in U.S. District Courts. As a matter of background, all new owners of a 2017+ Ford GT were personally accepted by Ford through an application process that dated back 2 and half years ago. Over 8,000 applications were received for 500 build slots. One key provision to being accepted was that the buyer was required to enter into a legally-binding agreement that the original owner could not sell his or her car for a minimum period of two years from the date of delivery. Both of the cars that sold were sold were done so in what one might describe as being "black market" sales. Both sellers were sued by Ford Motor Co. That being said, from a legal perspective my car has no real secondary "market value" beyond my original purchase price. However, I highly suspect (and I hope I'm right!) that after two years, my car could be worth $1.5 Million, or perhaps more because it is one of a handful of 2018 limited Heritage Edition cars. So, if I want to be sure I am covered in the future, I need to set the value appropriately now as you have suggested. If you recommend that we set the value at $1.5 Million, or $1 Million, etc., let me know if this is the best move to make. I am also quite curious as to what the premium charge would be for $1.5 vs. original MSRP. Knowing that the car basically sits in a vault and only sees the light of day at significant cars shows and events, I want to be covered now and in the future, but don't expect that the risk will be significant due to its limited use. Let me know.

AGENT RESPONSE TO ABOVE:

Hi Mr. Cantwell,

I apologize for the delay in getting back to you – I was negotiating with the underwriter. If we leave the Ford GT at the original purchase price limit - the annual premium would be $ 1,400.00. If we increase it to the $1,500,000 limit – the annual premium would be $3,600.00 – total annual premium. But for the entire collection, the total bill will only would only go up by $624. I know it seems like my numbers are off, but the underwriter has agreed to lower the overall collection rate based on the new total dollar value. Please let me know which way you would like to go.


THE UPSHOT -

The numbers did seem odd to me. If I insure the value at around half a million, my premium would go up $3,600 for the NGT, but TOTAL for the whole policy would only go up by $624 a year. I spoke with my agent just be sure I understood the math. The bottom line is that my new annual premium will only go up by $624 for my entire collection by adding the NGT at a value of $1.5 Million. The underwriter has basically given me a huge discount on all cars due to the addition of the NGT. It would have gone up even more if I just kept my coverage on the NGT at the original MSRP purchase price. With the 150% agreed value clause, it will be insured in the future for $2.25 Million. So why am I sharing this? As we all know the true "market price" is unknown at this time. There really isn't a secondary market for these cars, at least until about a year for now for the 2017 cars. Will the NGT go up in value in the future? Most likely the answer is YES. So I believe that I am adequately covered now an in the future. It also points out that there is strength in numbers. The lesson to others is to shop around, group your collection into a collector policy and you may be surprised at the savings you will realize.
 
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soroush

Ford Gt Owner
Mark II Lifetime
Aug 8, 2007
5,256
Tim I need the number to your guy :)

great lesson and very surprising that they would lower all the other based on the total amount. I may have to see what my carrier says regarding this

I have read other insurance thread and I always thought most pay way too much for insurance, that is definitely not the case here. congrats on the car and glad insuring didn't turn out to be a hassle.
 

jr66

GT Owner
Mark IV Lifetime
Sep 22, 2017
272
scottsdale
Sounds like government accounting. I wonder what Hagerty would quote?
 

GKW05GT

GT Owner
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May 28, 2011
2,755
Fayetteville, Ga.
Interesting thread for future owners. Thanks for sharing!
 
I thought Ford wanted these cars to be driven and used? By the owner's admission, this one will not be ....
 

Austinj427

Well-known member
Feb 12, 2018
61
Colorado
That's incredibly cheap..
 

STORMCAT

GT
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May 25, 2006
7,549
Ft. Lauderdale
Thanks for the information to Tim. Do you have any limitations on miles driven per year?
 

GTdrummer

GT Owner
Mark II Lifetime
Le Mans 2010 Supporter
Mar 13, 2010
2,104
Richmond Virginia
Tim:

I don’t doubt the numbers but that sounds really low. Are they insuring your house for $25,000 premium or something ��? I gotta believe they are making it up somewhere.
 
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Drew@ClassicAuto

*Supporting Vendor*
Supporting Vendor
Jan 10, 2008
181
All -

Let me dispel a few things given my knowledge of how the AIG program works, whether if with BJ/Bridgepoint, etc. They do not offer standalone collector car policies with AIG. The only way you will get the collector cars or collection insured is if you have your home(s) qualify for their private client program. I work with an agent in NY who offers a variety of policies with private client carriers and they are all the same. The collector car is an entry point to discuss the policies they really want (home, regular auto, jewelry, umbrella, etc). Essentially they run physical damage coverage on an inland marine policy and they are able to float the rate to whatever they are comfortable with. So even though they are doing this for Tim, treatment is not equal to others. Other factors considered, where is the car garaged/registered, is it a coastal risk, security safeguards in the garaging location, etc.

Also the 150% agreed value clause - for you to be paid at the 150% level, you would have to show proof that the retail market at time of loss is now 0-50% more than the car is insured for.

Number of cars in a collection do play a huge factor for all collector car policies whether insured by me or any of my competitors. Single car policies will always be more than a policy with a collection. Higher number of cars insured, better the rate. The policy offered with American Modern it does have an automatic inflation guard built in (2% per policy quarter, capped at 8% per policy year, with a reset at renewal).

Unfortunately car forums are a double edged sword for insurance providers given no 2 risk profiles are the same. Obviously I do not insure everyone on the forum, nor did I ever expect, nor do I want to (always good to spread the risk). I am a consumer as well and never take things personally nor do I deter anyone from shopping around. However, I am aware that the collector car insurance space is a very competitive one today and the sharks are circling for new accounts. Given that, we pride ourselves with doing everything we can to get our customers the best price and give them the best customer service possible. For those of you with our agency today, I appreciate your business over the years and am always willing to talk shop when needed or explore other options if the situation requires it.
 
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PeteK

GT Owner
Mark II Lifetime
Apr 18, 2014
2,267
Kalama, Free part of WA State
That's good to know, just in case I get an allocation in the 2nd round. FYI, for my 2005 GT "driver" (stated mileage as 6000/year) my annual premium was less than $1000, but that's with 4 cars on my policy. Pretty reasonable, considering the replacement value.
 

soroush

Ford Gt Owner
Mark II Lifetime
Aug 8, 2007
5,256
I thought Ford wanted these cars to be driven and used? By the owner's admission, this one will not be ....


Thats a naive thing to say....


I believe that comment was more for the assurance of the insurance underwriter than the real amount the car will be used. Insurance companies want to be sure the car is well protected to reduce their risk and
The people you are talking about that the ones that will never drive their GT's are usually not the ones on this forum. Sadly there are some out there that are doing exactly that, never driving their cars. There are not one but two in my area that are sitting in dealerships waiting for the 2 year period to run out before getting sold. that really pisses me off that they were able to secure cars just to let them sit....
 

Ed Sims

GT Owner
Mark IV Lifetime
Apr 7, 2006
7,850
NorCal
I'm going with Classic Auto with my NGT as I did with my '05 GT. I'm also having Milliken Ford deliver my NGT. Both are Forum sponsors & we should support those who support us. It helps they are both fairly priced, reliable & honest.

Ed
 

GTdrummer

GT Owner
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Le Mans 2010 Supporter
Mar 13, 2010
2,104
Richmond Virginia
I'm going with Classic Auto with my NGT as I did with my '05 GT. I'm also having Milliken Ford deliver my NGT. Both are Forum sponsors & we should support those who support us. It helps they are both fairly priced, reliable & honest.

Ed

Agree
 

shesgotlegs

GT Owner
Mark II Lifetime
Jul 20, 2006
1,181
I'm going with Classic Auto with my NGT as I did with my '05 GT. I'm also having Milliken Ford deliver my NGT. Both are Forum sponsors & we should support those who support us. It helps they are both fairly priced, reliable & honest.



Ed

:thumbsup
 

Awsum GT

GT Owner '18
Mark IV Lifetime
Sep 17, 2005
3,985
Carmel & Cntrl Ca
I'm going with Classic Auto with my NGT as I did with my '05 GT. I'm also having Milliken Ford deliver my NGT. Both are Forum sponsors & we should support those who support us. It helps they are both fairly priced, reliable & honest.

Ed

So what value is Classic Auto going to insure the car for? Purchase price? 150% of purchase price... or something higher based on sales to date?
 

Drew@ClassicAuto

*Supporting Vendor*
Supporting Vendor
Jan 10, 2008
181
So what value is Classic Auto going to insure the car for? Purchase price? 150% of purchase price... or something higher based on sales to date?

Given the recent sales our carrier is open to valuation on the new gen GT.

It is all a function of what you are wanting to pay vs risk you are willing to take. In my experience most people want to cover their investment or a tad more given premium is dictated by the valuation. I would say the majority have insured the car for close to purchase price or a tad higher.

Also to clarify - the 150% coverage by AIG or other private client policies - the way that works is you insure the car for say $1million and if you can show the car at time of total loss to be say replacement cost at $1.5 you would get the full agreed value at $1million plus 50% of the 1.5mill so total payout at $1.25mill minus deductible.
 

GTdrummer

GT Owner
Mark II Lifetime
Le Mans 2010 Supporter
Mar 13, 2010
2,104
Richmond Virginia
“Also to clarify - the 150% coverage by AIG or other private client policies - the way that works is you insure the car for say $1million and if you can show the car at time of total loss to be say replacement cost at $1.5 you would get the full agreed value at $1million plus 50% of the 1.5mill so total payout at $1.25mill minus deductible.




Then you find the nearest lake, drive the car in the lake hoping that 2 nitwits aren’t filming it.
 

BlackICE

GT Owner
Nov 2, 2005
1,416
SF Bay Area in California




Then you find the nearest lake, drive the car in the lake hoping that 2 nitwits aren’t filming it.

Why not? Don't you receive a all-expense-paid free vacation at Club Fed?
 

TO AWSUM

Ford GT Owner
Mark II Lifetime
Jul 4, 2007
1,506
Niceville FL
Yogi understand what you are trying to say, but your math is wrong. 50% of $1.5M is $750K, so the math is $1M + 750K = $1.75M. I think what you meant is 50% of the difference between $1M and the market value which you illustrated as $500K, not 50% of $1.5M.
 
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timcantwell

Le Mans 2010 Sponsor * Moderator
Mark IV Lifetime
Le Mans 2010 Supporter
Jan 22, 2006
2,634
N.E. OH & Naples, FL
All -

Let me dispel a few things given my knowledge of how the AIG program works, whether if with BJ/Bridgepoint, etc. They do not offer standalone collector car policies with AIG. The only way you will get the collector cars or collection insured is if you have your home(s) qualify for their private client program. I work with an agent in NY who offers a variety of policies with private client carriers and they are all the same. The collector car is an entry point to discuss the policies they really want (home, regular auto, jewelry, umbrella, etc). Essentially they run physical damage coverage on an inland marine policy and they are able to float the rate to whatever they are comfortable with. So even though they are doing this for Tim, treatment is not equal to others. Other factors considered, where is the car garaged/registered, is it a coastal risk, security safeguards in the garaging location, etc.

Also the 150% agreed value clause - for you to be paid at the 150% level, you would have to show proof that the retail market at time of loss is now 0-50% more than the car is insured for.

Number of cars in a collection do play a huge factor for all collector car policies whether insured by me or any of my competitors. Single car policies will always be more than a policy with a collection. Higher number of cars insured, better the rate. The policy offered with American Modern it does have an automatic inflation guard built in (2% per policy quarter, capped at 8% per policy year, with a reset at renewal).

Unfortunately car forums are a double edged sword for insurance providers given no 2 risk profiles are the same. Obviously I do not insure everyone on the forum, nor did I ever expect, nor do I want to (always good to spread the risk). I am a consumer as well and never take things personally nor do I deter anyone from shopping around. However, I am aware that the collector car insurance space is a very competitive one today and the sharks are circling for new accounts. Given that, we pride ourselves with doing everything we can to get our customers the best price and give them the best customer service possible. For those of you with our agency today, I appreciate your business over the years and am always willing to talk shop when needed or explore other options if the situation requires it.

Well stated, and you are correct on most points, my residence is covered by them, but wasn’t originally. Every state and every person is different.
 
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