Understand the insurance options you have to protect yourself and your horse.
By Audrey Pavia | July 2012 Extra
Owning a horse can be an expensive proposition, especially if you aren’t financially prepared. A horse that becomes seriously ill can cost you a fortune in vet bills. Should the worst happen and your horse doesn’t make it, you will not only be emotionally devastated, but you will lose your financial investment as well. If your horse is stolen and not recovered, you’ll be without a horse and without the funds to buy another.
One way to help protect your horse and your pocketbook is to purchase equine insurance. The right plan will help diffuse costs if your horse becomes sick and will reimburse you for his value if your horse passes away or is stolen. You can also purchase insurance to help with liability issues relating to your horse—for instance, if someone is injured while riding or handling him, or if he damages a neighbor’s property—as well as insurance that will cover you if your horse becomes unable to perform the job you bought him to do.
Let’s take a look at the various types of equine insurance available to horse owners:
1. Major medical. If you have a major medical insurance policy for yourself, you automatically have a basic understanding of how it works for horses. Equine medical insurance covers veterinary costs such as diagnostic procedures, surgery, medication and veterinary visits associated with an illness or injury. Most policies have a deductible for each incident, and all have a limit on the amount the policy will cover per incident and per horse per year. These policies are reviewed for renewal by the insurance company’s underwriters each year and are subject to exclusions. For example, if your horse colics and needs surgery, and your insurance company pays a portion of your vet bill, the policy may not cover colic when it’s renewed the following year.
Some insurance companies require a veterinary health certificate as proof that your horse has no pre-existing conditions before you take out the policy; anything related to these conditions will be excluded from the policy. All insurance companies have limits on age, too. Although it varies by company, if your horse is age 15 or older, you’ll have a tough time finding major medical insurance that will cover him.
2. Surgical. Unlike major medical policies, which cover all types of veterinary costs, surgical policies only come into play if your horse needs an operation. They cover expenses directly related to the surgery, such as the surgeon’s fee and the price of the anesthetic used on the horse during the procedure. They don’t cover the cost of the hospital stay before and after the procedure, which can be a large part of the bill. However, if major medical insurance is out of your price range, surgical is the next best thing—and better than no insurance at all.
3. Full mortality. When you take out a major medical or surgical policy on your horse, insurance companies also require that you purchase full mortality insurance (and vice versa) to make sure that you will do everything possible to save your horse. Should your horse die from an illness or accident, or if he is stolen and not recovered, full mortality insurance will reimburse you the previously stated value of the horse, determined at the time your horse is insured. Keep in mind that if your horse is older than 15, you may have trouble finding full mortality coverage.
4. Limited mortality. If your horse dies as a result of an accident or another specified cause, limited mortality insurance will reimburse you the value of the horse. You don’t need to have a medical or surgical policy in place in order to purchase this type of insurance.
Most people who purchase limited mortality insurance do so because they have special circumstances that place their horse at risk of an accident. If you are shipping your horse cross-country, for example, you may want to purchase a limited mortality policy. If your horse happens to die in a trailer accident during shipping, the insurance company will pay you the declared value of the horse.
5. Loss of use. Loss of use insurance protects you if your horse is injured or becomes ill to the point where he can no longer do what you bought him for—usually riding. The insurance company pays out a predetermined sum, which is based on an amount of money agreed to by both you and the company. You also need to carry major medical insurance when you take out a loss of use policy.
Although loss of use insurance sounds like a good idea, it can be very difficult to collect on these policies because it’s not easy to prove to the insurance company that a horse is no longer useful for its specified purpose. Some policies also require that the owner euthanize the horse or turn it over to the insurance company in order to collect.
6. Personal liability. Similar to the liability coverage in a homeowner’s policy, personal liability insurance protects you in the event your horse injures someone or damages property.
Many people find this type of insurance provides peace of mind, especially if their horses spend time around a lot of different people. Before you purchase this type of insurance, make sure your homeowner’s policy doesn’t already include this kind of coverage.
The price of insurance for your horse depends on several factors, including where you live, the declared value of your horse and the type of coverage you buy. Major medical and mortality insurance typically cost anywhere from $400 to $800 a year, depending on the value of the horse, the deductibles you choose and the payout cap.
The best way to find a good equine insurer is to ask other horse owners. Ask your horse friends and professionals in the industry who they recommend. You can also look at ads in horse publications, and do a search for “equine insurance” on the Internet as well. Once you have made a list of agencies, make some phone calls to determine the best option for you and your horse.
Make sure the insurance company you choose is underwritten by a legitimate carrier. Ask the insurance agent a lot of questions about the policy and the company that backs it before you sign up:
- How much is my annual premium?
- Does the policy have any exclusions?
- What is the deductible on the policy?
- What is the percentage that will be paid for each claim I file?
- Which company underwrites the policy?
- How long has that company been in business? (You want the answer to indicate that the company has been around for at least 10 years.)
Understanding all of the equine insurance policies available can help you decide which, if any, are suitable for you and your horse.