Horse Insurance –
What Every Horse Owner Should Know
By Tami George, Equine Insurance Specialist and Licensed Producer
Most of us consider our horses family members. But the bottom line is that they can also represent a substantial financial investment – especially in the world of competitive equestrian sports. Can you afford to lose your horse, or worse yet, to spend $5,000 to $10,000 on colic surgery or some other catastrophe, only to then lose the horse as well?
It used to be that the main reason people insured their horses was to prevent that scenario – the idea of an expensive colic surgery is more than most of us can deal with. With better technology and a deeper awareness on the part of horse owners, there are so many other events that can trigger a long, expensive line of vet bills. Insurance can defray many of these costs, from diagnostics to medications to rehab therapies. With this in mind, horse insurance can be one of the best deals around.
Bear in mind that not all horse insurance policies are created equal. Coverage terms can vary significantly among companies, so it’s always best to read the fine print when shopping around.
The starting point for all horse insurance is mortality, or life insurance. Most horse owners will want “all-risk” mortality which covers the horse should he die or have to be euthanized as a result of an accident, illness or injury. Mortality also includes theft. The chief difference among mortality policies is whether the policy is “Agreed Value,” which means that the insurance company agrees to pay you an agreed upon sum should the horse die, and “actual cash value” or “fair market value,” which gives the insurance company the right to determine the value of your horse at the time of death. In an unstable economy, this can become an extremely important consideration.
With mortality coverage in place, most horse owners opt to add either surgical or medical/surgical coverage to their policies. Full medical/surgical coverage reimburses the horse owner for expenses resulting from an injury, lameness or illness after a set deductible has been met, up to an annual limit. Surgical coverage only is a less expensive option that covers life-saving surgical costs only – not other non-surgical procedures, diagnostics or therapies. Naturally, routine maintenance type expenses such as vaccinations, worming and basic dental are not covered. Other optional coverages include loss of use and infertility. All of these are in addition to the mortality insurance; they cannot be purchased alone.
Here are some common questions and answers relating to equine insurance:
Q* Isn’t horse insurance expensive?
A* Not at all – it depends on the value of your horse. For example, to insure a $6,000 reining horse for mortality and surgical might run around $300 – less than a dollar a day!
Q* Don’t insurers pretty much offer the same coverage?
A* NO – and that’s why it’s important to read and understand the actual policy language.
The medical/surgical coverages offered are often very different, particularly in what is excluded from coverage under the policy. Also, the maximum benefit may be tied to the value of the horse – so someone who owns a $4,000 horse who thinks they’ve got $10,000 of medical/surgical coverage might be very surprised to find they’ve only got $4,000! Aftercare treatment is another area that varies among companies.
Q* What is the difference between an insurance company and an insurance agency?
A* An agent must be authorized by an insurer to solicit insurance, and depending on the authority granted by the insurer, may negotiate and bind coverage. The insurer underwrites and binds insurance coverage for an insured in order to indemnify their losses and provide benefits subject to the terms of the insurance policy.
It’s important to know what insurer an agent is representing. You can get an idea of the insurer’s commitment to the equine industry by visiting their website. You’ll also want to know how many years of experience the insurer has with insuring horses – many companies have come and gone from the equine insurance market over the years. The financial rating of the insurer is another important consideration; they should be rated at least “A” (excellent) with the A.M. Best rating service.
Q* Why do I need to notify the insurer if my horse is treated for a minor condition?
A* It is a standard condition of all mortality policies and medical/surgical endorsements that the insurer be notified in the event of any illness, disease, lameness, injury, accident or physical disability to the horse. This is required because minor events can lead to more serious and sometimes life-threatening conditions.
Q* My horse had several colic episodes and now my policy excludes coverage for colic; how are exclusions determined?
A* Information provided from the declaration of health or vet certificate is used by the insurer to evaluate any pre-existing health conditions. The insurer may require additional information from the insured or their vet before deciding if a pre-existing condition will be excluded. Based on individual circumstances, the exclusion may be reviewed during the policy period or at policy renewal.
When making the decision to finally insure one’s horse, it’s important to compare apples to apples. An experienced agent, familiar with horses and with horses in your particular discipline, can help you read the “fine print” and understand the coverages and terms involved. In the final analysis, whether or not to insure your horse comes down to financial and personal peace of mind. For many of us, our horses are family members we want to provide the best for – and insurance can give us the means to do so.