Equine Insurance Part I- The Basics

My favorite  “Dad Saying” about insurance is “You should always insure what you can not afford to lose.” Unfortunately, while many of us pay for insurance, most of us do not understand the policy and all its conditions. Having been an insurance attorney, I have seen the effects this can have. A horse, particularly a performance or show horse, is an expensive investment but its behavior can be unpredictable and its health fragile. Therefore, equine insurance is a product which many horse owners should purchase. This post is the first of a several part series explaining equine insurance, what you should look for when purchasing the policy, and issues you should consider when filing a claim.

The first decision you must make is the type of insurance you need to purchase. The basic types of policies include:

  1. Mortality- Pays upon death of the horse
  2. Loss of Use- Pays a percentage basis if the horse is permanently disabled from its intended use or purpose
  3. Major Medical- Akin to health insurance and pays for veterinary care
  4. Surgical- Pays for certain medical procedures, such as colic surgery
  5. Breeding Infertility- Pays for a stallion or mare who is infertile
  6. Specified Perils- Pays in the event of certain types of losses, such as fire or transportation

 

Many equine insurers require an examination by a veterinarian and a signed certificate before the policy can be issued. The veterinarian may not simply sign off on the horse and must perform an exam to certify as to the horse’s health on the date the exam is performed. The costs associated with the exams are generally borne by the insured but the exact requirements of the exam are set by the insurance carrier.

You should also know the value of the policy you are purchasing and how coverage is determined. For example, if the policy is for “loss of use,” the coverage may be different from a mortality claim if the horse has “salvage value.”

It is important to remember the veterinarian’s role in the insurance process. The veterinarian does not determine the horse’s value, nor is the veterinarian responsible for reporting any losses to the insurance carrier. The responsibility for complying with policy conditions are on the insured. If an insured has questions regarding the policy, a veterinarian is not the appropriate person to ask. An insurance policy is a legal document and questions are best answered by qualified counsel.

The rest of our insurance series will be posted over the next several weeks. Please come back for the following topics:

Part II- Equine Mortality Insurance, the Basics

Part III- Equine Mortality Insurance, Conditions Precedent

Part IV- How to File a Claim

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