The Insurance Company Built Inside a Hobby

Hagerty's net income grew 62x from $2.4 million to $149 million in three years.

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Collector car insurance has always been a strange corner of the industry. According to SEMA, there are at least 9.4 million pre-1990 vehicles still registered on American roads. Hagerty's own research puts the broader enthusiast market at roughly 43 million collector vehicles worth an estimated $1 trillion in insurable value — about 16 percent of every car on U.S. roads. But mainstream insurers never built products for them. Standard auto policies use depreciation-based pricing designed for daily drivers. A restored 1969 Camaro gets valued the same as a used one, at whatever depreciated market price remains.

That mismatch created real pain. Standard policies offered "actual cash value" coverage, which pays the depreciated market price at the time of loss. A collector who spent $80,000 restoring a classic could receive a fraction of that in a claim. Some insurers offered "stated value" policies that sounded better but paid the lesser of the stated amount or actual cash value. Only "agreed value" coverage, where insurer and owner lock in a price upfront, properly protected collectors. Big carriers didn't offer it.

The demographics made the market look even riskier. Car club membership was declining. Industry insiders warned the hobby was aging out. The people who owned these cars were deep into retirement; the people who might replace them were buying something else. The fear was straightforward: the market was contracting, and institutional capital doesn't chase contracting markets.

So you had billions in insurable assets, a coverage gap that punished the most passionate customers, and a demographic outlook that scared off serious money. Most companies saw a niche to avoid. The Hagerty family saw something else.

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Frank and Louise Hagerty started the company in 1984, insuring antique wooden boats from their basement in Traverse City, Michigan. By 1991 they had expanded into classic cars. Their son McKeel took over as sole CEO in 2012 and made a bet that changed the company's trajectory: Hagerty would stop competing as a niche insurer and start building an enthusiast brand.

The first move was creating media. Hagerty built a content operation that now draws 3.5 million YouTube subscribers, publishes a magazine with 2.2 million in circulation, and has accumulated more than 785 million total video views across platforms. Shows like Barn Find Hunter and Redline Rebuild turned the brand into a destination. That audience became the top of a conversion funnel that feeds every other business line. Someone who would never search for "classic car insurance" might spend an hour watching an engine rebuild at midnight, and Hagerty is waiting when they do.

In 2017, Hagerty launched the Hagerty Drivers Club, a paid motor club with flatbed roadside assistance, local events, and unlimited access to the Hagerty Valuation Tools database, which tracks pricing on 40,000 collector vehicles. The valuation tool is the strategic crown jewel. Hagerty insures 2.8 million vehicles, so every policy change, cancellation, and claim feeds private-sale data back into the price guide, data no competitor can replicate. That creates a flywheel: a more accurate guide attracts more users, more users become members, more members buy insurance policies, and more policies sharpen the data further. The SPAC investor presentation put the lifetime value to customer acquisition cost ratio at greater than 10x.

Then came the marketplace. In 2022 Hagerty acquired Broad Arrow Group for roughly $90 million, adding live auctions, private sales, and collector car financing. Broad Arrow transacted $86 million in its first partial year under Hagerty's ownership. By 2025, that figure had reached $624 million, up 97 percent year over year.

Hagerty went public in December 2021 through a SPAC merger with Aldel Financial at a $3.13 billion enterprise value. State Farm and Markel, both strategic partners, co-led a $704 million PIPE. The stock gained 57.8 percent on its first day. Then it followed the classic SPAC pattern: a 64 percent peak-to-trough decline through 2022 as markets punished the entire SPAC class. The stock has never reclaimed its all-time high.

But the underlying business has been a different story. Revenue grew from $619 million in 2021 to $1.46 billion in 2025. Net income went from $2.4 million in 2022 to $149 million in 2025. The loss ratio at Hagerty Re hit 39.3 percent in 2025, down from 46.4 percent the prior year, and the combined ratio fell to 86.6 percent. For context, standard personal auto loss ratios ran between 75 and 80 percent during the worst years of 2022 and 2023 before recovering. Collector cars are garage-stored, low-mileage, and driven carefully. Hagerty's own data shows the average policyholder puts fewer than 3,500 miles annually on their collector vehicle. They are fundamentally better risks, and decades of proprietary data let Hagerty price that advantage precisely.

The demographic fear eventually proved overstated. In 2023, Gen X overtook Boomers as the largest source of Hagerty insurance quotes. Hagerty's own Future of Driving survey found that roughly 60 percent of Gen Z respondents expressed interest in classic car ownership, compared to 31 percent of Boomers. The Drivers Club added a record 371,000 new members in 2025, bringing total paid membership to roughly 930,000.

Hagerty now partners with 9 of the 10 largest U.S. auto insurers to distribute collector coverage. Its policy retention rate sits at 88.7 percent, with a Net Promoter Score of 82, more than double the auto industry average of 39. The platform model hasn't just defended the niche. It has redefined who belongs in it.

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$1.46 billion - Total revenue in 2025

$149 million - Net income in 2025

2.8 million - Collector vehicles insured by Hagerty at the end of 2025.

930,000 - Paid Hagerty Drivers Club members

$624 million - Total Broad Arrow marketplace transactions in 2025

40,000+ - Collector vehicles tracked in the Hagerty Valuation Tools database

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