By Brent Allen
Allen Financial Insurance Group / The Equestrian Group
Buying a horse for business or pleasure is a big investment. As any horse owner knows the initial purchase price is just a down payment on continuing expenses such as boarding, training, transportation, show fees, farriers and veterinarians. An injury or extended illness can often cost thousands of dollars. If your horse ultimately dies you not only lose your initial investment but have to deal with the cost of a new replacement.
There is a financial hedge against this type of loss in the form of horse mortality and major medical insurance. The equine mortality and major medical policy is very similar to policies you may carry on yourself. It is available for foals, yearlings, stallions, mares and geldings of all breeds and types.
Horse Mortality Insurance
The mortality or life insurance portion will insure your horse against death from almost any cause including transportation or humane destruction made necessary from an accident or illness. The coverage territory is usually the United States and Canada. Most policies include loss from the theft of the animal as well.
The horse valuation is typically the purchase price. Other factors that may increase the value would be prize winnings, performance level and conformation. Maintenance costs and training expenses are not included in the valuation calculation.
A horse can be usually be insured at 24 hours from birth to twenty years old. The premiums are most affordable between Yearlings and fourteen years old. Depending upon breed and discipline most horses can be insured at a 3% to 4% rate. At fifteen years the rate begins to climb at 2% to 3% each year. Premiums are based upon the horse’s breed, age and use.
Equine Major Medical Insurance
Major medical insurance is actually an endorsement to the mortality coverage and cannot be purchased separately. The policy will pay for reasonable veterinary, medical and surgical care charges resulting from accident or injury. Although the scope of coverage will vary from insurer to insurer you will generally be offered a selection of coverage limits and deductibles.
Medical policies do not usually cover the cost of routine care such as vaccinations and dental care. They also will not cover elective or cosmetic surgeries or treatment for developmental or congenital birth defects.
You will be required to submit a Statement of Health form with the Horse Mortality Application. Coverage is bound upon receipt and acceptance of the completed forms. A veterinary certificate may also be required for higher valued animals. The insurance company will review the documents and offer terms which may include exclusions for pre-existing conditions such as a history of colic.
Additional Equine Coverage
In addition to mortality and major medical coverage there are a number of additional valuable endorsements available to the horse owner.
- A Guaranteed Renewal endorsement offers the guarantee of one additional year of mortality coverage with no exclusions should the horse become or injured during the policy period.
- An Agreed Value endorsement states that the insurance company agrees the value stated in the policy is the current market value of the animal. An “actual cash value” or “fair market value” at the time of the loss definition gives no guarantee that the amount you have insured your horse for is the amount you will collect at the time of the loss.
- Loss of Use coverage will pay if your horse becomes permanently unable to perform it’s insured use as a result of an accident, illness, injury or disease.
- The Stallion Infertility endorsement provides coverage in the event your proven stallion becomes permanently incapable of settling mares in foal as a result of accident, sickness or disease.
- Mortality coverage can also be extended to include international transportation to and from approved countries.
- An Equine Third Party Liability endorsement can provide liability protection in the event your horse injures a third party or damages their property. This option usually offers a very low liability amount and it wise to carry higher limits of coverage.
When purchasing your horse mortality policy it is essential that you deal with an experienced equine agent who can discuss and explain the coverage and options available to you. Policies can look the same but there can be significant variations and pitfalls between coverage offered by the specialty insurers in this field.