Equine Insurance Part II- Equine Mortality Insurance Explained


Most of my clients  have some sort of experience with insurance, most often through the purchase of a home or auto. But, when you are spending as much on a horse as you do on your auto, or for some people a house, it stands to reason that horse would be insured as well.

There are several types of equine insurance, but for this post, we will be looking specifically at mortality insurance. This is a type of insurance that pays out when the horse dies, must be humanely destroyed, or is stolen during the effective period of the policy.

Equine policies used to be written for the actual cash value or fair market value of the horse. This means that the insurance carrier would determine the value of the horse after the loss in order to establish the amount of payout. It is easy to see why this would cause conflict since the insurance carrier may be tempted to undervalue the horse to avoid a high payout. Consequently, the more recent trend is to write insurance policies on an “Agreed Value” basis, wherein the insured and the insurance carrier agree in advance on a definite sum. There are certain things, which they if occur during the policy period, will reduce the agreed value of the horse. These things will be discussed in a later post.

In order for the insurance policy to payout, they generally require the horse to die or be humanely destroyed either during the policy period, or within 90, 120, or 135 days after the policy period expires, so long that the death was necessitated by an event that first occurred during the policy period AND was reported to the insured during the policy period. That is not to say the insurance carrier wants the horse to be harmed, but the policy is similar to a “life insurance” policy for humans.

As with any policy, there are certain conditions precedent to coverage, meaning an event which must occur before the insurance carrier will pay out. Policies also have exceptions which are not covered. The conditions precedent to coverage will also be discussed further in another post.

Another important consideration in equine mortality insurance is the “humane destruction.” The policy will define the covered loss in a situation where the horse must be humanely destroyed. The policy language will become an issue when the criteria for the policy is not satisfied, but the horse may have met some other criteria for humane destruction, such as that set by the American Association of Equine Practitioners. It is also important to note that the loss will not be covered if the horse suffers a serious injury or otherwise becomes disabled. Coverage for “loss of use” must be purchased if the horse survives but is unable to work.

Most insurance policies also contain a provision requiring legal action to be brought within a certain amount of time, most often twelve months. However, in Florida, policy provisions which shorten the statute of limitations, which is four  years for breach of contract, have been held unenforceable.

If you  have any legal questions regarding your policy, you should ask a qualified professional.


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