Horse Insurance 101

Let's face it, equine insurance falls way to the bottom of the list of topics any horse owner wants to talk about. Discussing worst case scenarios doesn't exactly make for enjoyable barn aisle or ringside small talk. Unfortunately, as in many areas of life, what you don't know can hurt you. And can also extend to your horse.

So without being too morbid, but in the interest of helping you protect your investments--following is some information that might help you consider putting "Get Horse Insurance" on your to-do list.

The Basics

The basic idea behind insurance is that you are paying a fee to an insurance company in order to transfer your risk of a possible loss to them, and the fee you are paying is significantly less than the amount the company has agreed to pay you in the event such a loss happens. So, if you cannot afford to replace your horse in the event of his death, or if you cannot afford the costs of veterinary care in the event your horse suffers a serious illness or injury or accident, equine insurance can be a cost effective way to mitigate your risk.

For many of us, our horses are best friends and family as well as a significant financial investment, and we absolutely do not want to be in a situation where financial considerations dictate the quality of care that we are able to provide. Or, even if you have the funds on hand to absorb these losses, you may still choose to invest a much smaller amount each year on equine insurance premiums so that you are not forced to tap into your savings if the unexpected happens.

The Experts

Deciding what equine insurance coverage to purchase is quite important. While the basics are similar, the actual coverages vary depending on which insurance company provides it. The number of insurance companies in the U.S. that offer horse insurance policies barely reaches into the double digits, though the number of agencies (the organizations that you will usually work with to see about getting coverage) is far higher, therefore the equine insurance agency you work with is very important.

It is very beneficial if the agency has access to more than one company's programs so they have options to find a policy that best fits your needs, from both a cost and coverage standpoint. In addition, look for someone who is willing to answer your questions promptly and clearly, responds to emails and voice mails in a timely manner, and will provide you with a binder as proof of coverage until the actual insurance policy is sent to you. And most important--find an agent who is also an experienced horse person. They need to know the difference between dressage and driving, and OCD from EPM. You want someone who understands your passion.

Equine Mortality Insurance

When it comes to horse insurance, there are several options. For the purposes of this blog, I will concentrate on the two most common: Mortality and Medical/Surgical. The Equine Mortality insurance policy is the equivalent of life insurance for your horse. It provides coverage in the event the insured horse dies during the policy period from a covered accident, injury, illness, or disease, and includes possible coverage for humane destruction, and usually has limited coverage for theft.

Depending on the insurance company, Equine Mortality insurance is usually available for horses ranging in age from 24 hours up to 20 years old. Premiums are based on the horse's age, breed, use, level, and insured value. The rates for Full Mortality coverage for the average pleasure or competition horse age 2-14 with uses that include English/Western Show, Dressage, Show Hunter, Show Jumper, Cutting, Reining, Roping, Barrels--generally range from 3% to 3.9% of the horse's insured value. So the Mortality premium for a horse in that age range insured at a value of $10,000 would average between $300 - $390 a year. Rates for some uses, such as eventing, fox hunting, and endurance, are usually slightly higher, from 3.9%-4.75%, so still reasonable.

Typically the Equine Mortality policy also includes a free Emergency Colic Surgery endorsement (for horses without a history of colic/gastrointestinal issues) of up to $3,500-$5,000, depending on the horse's insured value and the insurance company offering the coverage. Equine Mortality insurance coverage is very comprehensive, but exact coverage terms vary by company. Common exclusions (reasons that would cause a claim to be denied) include, but are not limited to: pre-existing conditions, purposely harming the horse, not utilizing the services of a licensed veterinarian, late reporting of a loss, not following company requirements with regard to a loss, and some pretty farfetched possibilities such as war, destruction of the horse due to government order, and nuclear radiation. To see about an emailed Quote for your horse, go to our Equine Insurance Quote page.

In addition, you must contact the insurance company immediately in the event of a loss, and follow their instructions with regard to the submission of paperwork and the possibility of the need for a necropsy, the cost of which would not be reimbursed.

Equine Medical/Surgical and related Coverages

Major Medical, Veterinary Assistance, or Medical Assistance (the coverage name varies, depending on the insurance company) are the most popular coverages that horseowners add by endorsement to their Full Mortality policies, and are not available on a standalone basis. These coverages help reimburse for covered veterinary expenses (medical and/or surgical) in the event the horse suffers a covered accident, injury, illness, or disease during the policy period. For as little as an additional $350 annual premium (depending on the insurance company), these endorsements can provide for a limit of $7,500 for the policy period, with deductibles as low as $450 per claim. Depending on the horse’s insured value, higher limits of $10,000, $12,500, and $15,000 may also available, with varying deductibles, and annual premiums ranging from $450 to $600 or higher.

These equine health insurance types of coverages do not provide reimbursement for routine health maintenance or preventative care such vaccinations, deworming, dental or farrier care. Other common exclusions (though this is not an exhaustive list) include: pre-existing conditions, elective or cosmetic surgery, performance enhancing treatments, joint injections, integrative/alternative therapies (such as chiropractic, massage and acupuncture), the veterinarian's call charge, or transportation costs.

So if your horse colics, founders, runs through a fence, gets kicked, develops a lameness, or suffers any of the other countless injuries or illnesses from EPM to EHV that can keep you up at night, Medical/Surgical coverages should help reimburse for covered expenses after the deductible (and co-pay if one is required) is met. The actual coverage details vary depending on the insurance company, so it's a good idea to educate yourself about exclusions, co-pays or co-insurance (especially for diagnostic tests, and treatments such as shock wave and regenerative therapies), treatment time limits, and extension periods.

For more information on, go to the Equine Insurance FAQs, and Get a Quote pages.

Caveat Emptor

A few "let the buyer beware" items for consideration — Horse insurance is very different from human health insurance. For example, pre-existing conditions are not covered, even if the horse was insured under a prior policy when it first contracted the disease or condition. So, if for example your horse develops a lameness or requires colic surgery while he's insured, while the expenses for those (provided they are covered conditions) will be covered during the policy period in which they occurred, expect to see an exclusion for those health issues on the next year's policy when/if you renew your coverage. This is because the policies are one-year term policies and are reviewed and underwritten each year, therefore the conditions would be considered pre-existing and therefore excluded on the next year’s policy.

That being said, there are typically extension periods built into the policy for issues that continue beyond the policy's expiration. Also, as mentioned earlier, it is very important that you contact the insurance company immediately when a health issue presents itself. The policy requires it, and you could jeopardize your coverage if you fail to promptly report the issue. It is also in your best interests to do so because the claims adjuster can explain your coverage in detail so you can work with your vet and make a plan with that information in mind.

Something to Think About

There is no doubt that pondering all the worst case scenarios of horse ownership is uncomfortable at best, nightmare inducing at worst, which is another reason to consider horse insurance. Knowing that you're covered in case of the unthinkable buys you more than financial security. It also gives your peace of mind.

**This blog is for basic information purposes only, and does not constitute advice from Marshall & Sterling Insurance. Contact our office directly at (800) 432-1215 to speak with an agent for complete and current information regarding all equine insurance coverages.