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Supplemental Balance Sheet and Cash Flow Information
 12 Months Ended
Dec. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplemental Balance Sheet and Cash Flow Information
3 — Supplemental Balance Sheet and Cash Flow Information

Restricted Assets — The Company's MGA subsidiaries collect premiums from insureds on behalf of insurance carriers. Prior to remittance to the insurance carrier, these funds are required to be held in trust for the benefit of the insurance carriers and segregated from the Company's operating cash.

Hagerty Re maintains trust accounts for the benefit of various ceding insurers as security for its obligations for losses, loss expenses, unearned premium, and profit-sharing commissions.

The Company's wholly owned insurance carrier subsidiary, Drivers Edge, maintains assets on deposit with a number of regulatory authorities to support its insurance operations. Refer to Note 11 — Acquisition for additional information related to the acquisition of Drivers Edge.

BAC and its consolidated subsidiaries maintain bank accounts that are required for the operation of the BAC Credit Facility (as defined in Note 18 — Debt). The funds in these bank accounts represent security under the BAC Credit Facility and their use is restricted to the servicing of the debt outstanding under that facility.

The following table presents the components of the Company's restricted assets as of December 31, 2025 and 2024:

December 31,
20252024
in thousands
Restricted cash and cash equivalents$138,823 $128,061 
Fixed maturity securities675,302 577,688 
Equity securities34,871 11,839 
Total restricted assets$848,996 $717,588 
Variable Interest Entities — BAC and certain of its subsidiaries transfer notes receivable to wholly owned, bankruptcy-remote, special purpose entities (each, an "SPE") to secure borrowings under the BAC Credit Agreement (as defined in Note 18 — Debt).

These SPEs are considered to be variable interest entities (each, a "VIE") under GAAP and their financial statements are consolidated by BAC, which is the primary beneficiary of the SPEs and also a consolidated subsidiary of the Company. BAC is considered to be the primary beneficiary of the SPEs because it has (i) power over the significant activities of the SPEs through its role as servicer of the notes receivable used to secure borrowings under the BAC Credit Agreement; and (ii) the obligation to absorb losses or the right to receive returns that could be significant through its interest in the residual cash flows of the SPEs.

Refer to Note 7 — Notes Receivable and Note 18 — Debt for additional information.
The following table presents the assets and liabilities of the Company's consolidated VIEs as of December 31, 2025 and 2024:

December 31,
20252024
ASSETSin thousands
Cash and cash equivalents$697 $1,746 
Restricted cash and cash equivalents17,005 1,221 
Notes receivable81,740 49,337 
Other assets1,748 1,961 
TOTAL ASSETS$101,190 $54,265 
LIABILITIES
Accounts payable and accrued expenses$524 $280 
Debt, net68,423 30,193 
Other liabilities1,658 719 
TOTAL LIABILITIES$70,605 $31,192 
Supplemental Cash Flow Information — The table below presents information regarding the Company's non-cash investing and financing activities, as well as the cash paid for interest and taxes for the years ended December 31, 2025, 2024, and 2023:

Year ended December 31,
202520242023
Non-cash investing activities:in thousands
Issuance of notes receivable (1)
$12,132 $6,229 $6,492 
Collection of notes receivable (1)
$4,669 $8,084 $6,094 
Capital expenditures$1,693 $723 $282 
Acquisitions and investments$— $— $2,142 
Termination of MHH Joint Venture (Refer to Note 12)
$— $— $2,929 
Non-cash financing activities:
Loss on Warrant Exchange (Refer to Note 6)
$— $2,006 $— 
Exchange of THG units for shares of Class A Common Stock (Refer to Note 20)
$16,996 $3,227 $2,311 
Deferred tax assets and TRA liabilities recorded upon exchange of THG units for shares of Class A Common Stock (Refer to Note 23)
$1,318 $— $— 
Issuance of shares of Class A Common Stock resulting from the vesting of RSUs (Refer to Note 21)
$12,101 $18,621 $9,975 
Cash paid for interest$10,160 $8,613 $6,126 
Cash paid for income taxes: (2)
Federal$15,900 N/AN/A
State447 N/AN/A
Foreign63 N/AN/A
Total cash paid for income taxes$16,410 
(1)    In certain situations, BAC makes loans to refinance accounts receivable balances generated by Broad Arrow auctions and private sales. These loans are accounted for on the Consolidated Balance Sheets as non-cash reclassifications between "Accounts receivable" and "Notes receivable" and are not presented within Investing Activities in the Company's Consolidated Statements of Cash Flows. Upon repayment, the cash received in settlement of such loans is classified within Operating Activities in the Company's Consolidated Statements of Cash Flows.
(2)    Beginning with the year ended December 31, 2025, the Company has adopted ASU 2023-09 and as a result, cash paid for taxes, net of refunds received, is disclosed by jurisdiction on a prospective basis. For the years ended December 31, 2024 and 2023, cash paid for taxes was $17.9 million and $10.5 million, respectively.