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.
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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