Finding the Right Insurance Plan for Your Horse

Unsure about what they need and how much it will cost, many horse owners are hesitant to purchase an insurance policy. Those of use who have been lucky enough to own horses for years without encountering an expensive medical problem are often hesitant to commit to a guaranteed annual fee, with no guarantee that it will be necessary. Unfortunately the flip side of that coin is that your new horse can back off the horse trailer and injure himself the day you bring him home. Making the decision whether to purchase insurance on your horse is a question everyone must answer for themselves, but finding the right information can be tricky.

There are basically four types of insurance for the private horse owner. Major medical and mortality insurance are somewhat tied to each other. Mortality insurance reimburses you upon the death of your horse. Major medical/ surgical cover the medical expenses associated with illness and injury. Major medical/ surgical does not cover maintenance expenses such as vaccinations and worming.
Mortality insurance allows the horse owner to recoup their expense on the loss of their horse. It can relieve a great deal of financial pressure if you know that you will have the replacement value of your horse available to you in the case of an emergency.

Unfortunately many people become overwhelmed at this initial stage of the shopping process. If you buy a young horse, or a horse to retrain, it is very likely that your horse can quickly become much more valuable than his purchase price. Be up front with your agent. This is a very common situation, and most companies are prepared to deal with it.

The first thing to consider is that is of no benefit to you to insure a horse for more than he is worth. The cost of mortality insurance premium is tied to value of your animal, usually from 2 1/2 to 4 percent of his cost. Some companies will take your word for the value of the animal if it is below a certain dollar amount. Other companies will want to see documentation, such as training bills, show records or even a statement from a local professional. The bottom line is that insurance companies are aware that horses can increase in value. They expect it and are willing to work with you to document it. When shopping for an agent, ask them what methods they use to determine value. If you are unhappy with the answer, shop around.

Major medical and surgical is the bread and butter of what most owners want from insurance. Major medical and surgical coverage pays for colic surgery, ultrasounds and ulcer medications. The policy will likely include an aggregate limit of between $5,000 and $10,000 for the policy term. There will also be a per incident deductible. To the everyday horse owner, not having to make decisions regarding your horses care based on your checkbook is very comforting. Of course the downside to this is that once your horse has a condition, be it colic or a bowed tendon, when your policy comes up for renewal you may find that the affected part is excluded from coverage.

Sara Cunningham, with Cunningham and Cunningham Insurance, advised customers that it is not necessary to take your insurance companies first answer. Cunningham estimates that roughly 50% of insurance policies have some sort of exclusion to them. Her advice if your horse’s renewal comes up with an exclusion is to get your veterinarian involved. The veterinarian, working with your agent, can many times persuade the insurance underwriter to modify your policy.

If your horse has a preexisting condition that the insurance company wished to exclude, you may ask for a temporary exclusion. In the case of a temporary exclusion, the policy is written with the exclusion, if the covered animal goes for a predetermined length of time (6 months to a year) with no problems pertaining to the exclusion, it is dropped and your horse will receive full coverage.

Loss of use insurance is often listed along with major medical and mortality. If this is something that you are interested in, make sure that you read the fine print. Many companies will insist that if the horse can still serve his basic job function you do not collect on loss of use. If, for example, you have a high level jumper and he injures himself, once healed if he can still jump, but not to the level he once could, you can not collect on loss of use. Another, potentially more upsetting issue often overlooked in the loss of use policy is the fact that to pay out on loss of use, the owner must often times surrender their horse to the insurance company. Many companies will allow you to keep the horse and take a lower payout. This is, of course an important point to consider when choosing a carrier.

Liability insurance protects you financially in case your horse injures another horse or a person, either at his home or while at a show or other public area. Many people make the unfortunate presumption that their homeowner’s policy would cover any injury caused by their horse. A simple five minute phone call to your agent will give you a definitive answer, but the answer is usually no, the horse is not covered. If you are happy with your homeowner’s company and agent, they can usually provide an add on to your existing policy that will protect you. You can also purchase an equine liability policy through an equine carrier. Mary Moeller, of Marshall and Sterling, stresses that regardless of where you purchase your insurance, it is vital to carry liability coverage. Liability insurance for the private horse owner covers any injuries and medical expenses, whether the horse in on or off the premises.

Most horse owners, when opting for insurance, decide on a mortality policy coupled with major medical coverage. The advent of the internet has been a boon for consumers, and purchasing insurance is the same way. Most national insurance carriers have website where you can carefully study available options and many companies even allow you to purchase a policy online. Before purchasing a policy, you should check the status of the company with A.M. Best (http://ambest.com), a service that provides financial scores for insurance companies around the world. A rating of B+ or better indicates financial security.

Once common concern for most horse owners is the affordability of insurance. While it can seem pricey, purchasing insurance will at least provide you with a measure of control of your expenses. Typically mortality insurance runs from 2 1/2 to 4 % of the value of your horse. Mortality and surgical coverage is a flat rate on top of that, anywhere from $100 to $400 a year, depending on your discipline. You may have to meet a deductible as well. Liability insurance can often be added to the policy for less than $100 a year. If it seems like a large chunk to pay out, ask you agent, many companies are starting to offer monthly or quarterly billing plans, which may , at least seem, a little more manageable.

Once the insurance decision has been made, you will find the forms relatively simple to fill out. Although every company is different, generally speaking, if you are not involved in racing, your horse is relatively young (the cut off age varies between 12 and 18) and his value is not significant, you will likely be able to fill out a no frills application and have coverage on your horse immediately. If your situation is more complicated, or you have any questions, most agents are more than happy to discuss their procedures with you.

The most important piece of insurance purchasing advice, and the advice offered by both Cunningham and Moeller, is to read your policy. The time to learn about the procedure for emergencies, surgeries or heaven forbid, euthanasia, is not at the time you are faced with the decision. By reading and understanding your policy ahead of time you will be better able to make informed choices and lobby on your horses behalf.