Unsure If You Should Insure?
Equine insurance, for many, is often thought of as too expensive, too complicated, or just flat out unheard of. However, protecting assets is something insurance companies are built for, and when disaster strikes, they can be there to help. So why not insure your horse? Scott Lombard of Corinthian Insurance Agency and Joe Norick of Aon Private Risk Management gave information to help determine if getting equine insurance is right for you.
The first question that comes to mind with insurance may be, “why do I need it?” The answer is simple, according to Joe, “The main reason to get insurance is to offset your risk and create comfort.” Scott agrees, stating that paying the yearly premium is “pennies on the dollar compared to the benefits of having coverage when expenses of a major injury or illness that could result in not only medical cost, but sometimes you lose the horse and need the funds to replace it.” Policies can always be quoted to get an idea of what the owner will need to pay each month, and in many cases, it is pretty affordable for most horse owners.
To start, every equine insurance policy, according to Scott, “is an equine mortality policy (life insurance) with [an optional] major medical endorsement. You are able to have the mortality policy without the major medical endorsement, but you cannot get the endorsement without the policy.” Equine mortality policies usually include coverage if the horse dies or is stolen. By having the mortality policy being the base, horse owners can add on endorsements for further coverage.
Once you’ve decided to look into insurance, the first step is determining the value of the horse to calculate the equine mortality coverage. This is done by filling out a Value Substantiation Support Form, which gives the insurance company an idea of the horse’s value through show records and training forms, which they can compare to horses of similar age, breed, and discipline.
Once an amount for the equine mortality is calculated, a percentage of that, like with all insurance, is calculated to present a rate. The rate percentage calculates the premium, which is the amount that the horse owner will be responsible for paying the insurance company each year. It is important to keep in mind that an insurance company can give you a quote, but this amount can change with renewal each year, and that is where shopping for an insurance company comes in. Each company will have their own rates and plans, so be sure to shop around to find a good fit.
Outside of equine mortality, major medical is usually the more common endorsement to add on. Major medical can cover surgery and other medical procedures required to treat illness, injury, or disease. “The endorsements for major medical/surgical are flat rates with deductibles,” Scott says. “Coverage can be non-renewed if a horse has too many problems, as each company may view a risk differently.” With the policy being year to year, the insurance company may choose to not cover a pre-existing condition, especially if the horse has had previous coverage of that condition. For example, if a horse has surgery on his left front leg due to a fall, that left front leg may be excluded from future policies.
Further endorsements can vary from colic surgery coverage to transportation coverage, with each having its own method of determining the coverage amount. These types of endorsements can come in handy for clients who own expensive sport horses and want specific types of coverage; for instance, an Olympic horse that travels around the world may want to have air travel on their policy. This happens to be the case for some of Scott’s clients, though not all. “Most [of our clients’ horses] tend to be more expensive, but not always. Some are pleasure horses that do not compete at all but are precious to their owners that appreciate the value mortality/major medical insurance provides when things go wrong.” It’s completely up to the client.
We all know that for how strong horses can be, they are also very delicate creatures. Sometimes they can endure unimaginable things, and other times, they can roll the wrong way and be unable to get up. Joe recommends that if you are uneasy about getting insurance, but want to protect your horse, to “be sure you do it right and get an agreed upon value upfront.” That way the only surprise is when you will need to use your insurance, not pay for it. At the end of the day, equine insurance is not required, but in some cases is very beneficial—it’s all about finding out if that’s the case for you and your horse.