Is My Horse Worth Insuring?

Since I bought my first horse nearly a year ago, I’ve suddenly found myself wondering about equine insurance and if it applies to me. It’s relatively obvious that high-dollar horses like Kentucky Derby winners or Olympic-caliber show jumpers should be insured.

But what about my pet who I bought for comparative pennies and ride for fun, maybe hitting up a few local shows every now and then? Is investing in equine insurance worth it for me? And if it is, what are my options?

Why you might consider equine insurance

Owning a horse is a major investment, whether you purchased him for $1,600 or $160,000. In reality, the purchase price is the least of your investment. Feed, hay, routine vet care, emergency vet care, wormer and supplements, trimming or shoeing, equipment, boarding, and training and lesson fees (to mention a few) all add up big time.

There’s a good chance the premiums you would pay for equine medical or mortality insurance, even for your weekend trail horse, will cost you less over time than what you will pay in vet bills. No matter what your horse may be worth in purchase price, equine insurance might just be a smart way to protect your investment.

An equine insurance checklist from Equisearch.com recommends:

The decision to insure your horse is not always easy. Any horse is a financial investment and, like a home or a car, it is wise to protect that investment.

You may want to seek equine insurance if:

1. You want to protect the money you’ve invested in your horse and his training
2. You need medical coverage for possible injuries and illnesses to your horse.
3. You may not be covered under a boarding facility’s insurance policy.

Types of equine insurance for the horse owner

There are two basic types of equine insurance for the horse owner: mortality and medical. Think of them as corresponding to life and health insurance for people.

Equine mortality insurance

No matter how much you paid for your horse originally, he has some kind of value. And if he’s a project like mine is, he’s worth a whole lot more now that you’ve trained him than he was when you bought him. It’s certainly not a pleasant thought, but you should consider what it would cost to replace your horse should you lose him.

Most mortality policies cover just about any cause of death or loss. These usually include:

• natural occurrences such as colic
• fatal accidents including fire and lightening
• euthanasia
• theft
• freak accidents like wild dogs

Although age limits vary by provider, full mortality coverage normally is available to horses as young as 24 hours and as old as 17 years. When evaluating a policy make sure the exclusions are clearly spelled out. A company might be reluctant to pay, for example, if a horse dies due to real or perceived negligence or other human error. Equisearch.com

Equine medical and surgical insurance

Veterinary treatment for our horses has come a long way from the James Herriot days of random medicines and oils that sometimes worked but most times didn’t. Vet care has gotten highly specialized and more effective as we have better and better equipment and methods for correct diagnosis and treatment. The unfortunate problem is that many of these options are cost prohibitive for the average horse owner.

Medical and surgical insurance helps horse owners get the finances we need so that we never have to make the hard decision between letting go and authorizing vet treatments we can’t afford.

This kind of health insurance for horses covers injuries and illness that occur while the policy is active. Typically, the coverage includes diagnostics, medications, surgery and postoperative care. It does not cover routine care such as spring shots or teeth floating.

What is excluded and what is included are the most commonly misunderstood aspects of equine medical insurance. Most providers place a 12-month exclusion for pre-existing illnesses and injuries.

“A lot of people are confused about exclusions,’ says Jennifer Faust of the United States Eventing Association’s equine insurance program. “They often think that if a horse has had a problem, you can’t insure it at all. Actually, exclusions are very specific. If your horse has a preexisting bowed tendon on the left front leg, the exclusion is going to address only the left front tendon bow.”

In most cases, if the horse heals and shows no recurring problems, the exclusion is likely to be lifted when you renew your policy.

Loss of use

In the event your horse becomes permanently unable to perform his insured use as a result of an accident, illness, injury or disease, this coverage pays 50 to 60 percent of his insured value. Read carefully. ‘External injury loss-of-use’ terminology is different from ‘full loss-of-use.’ A full loss-of-use policy will cover any injury that incapacitates your horse. External loss-of-use only covers accidents such as a trailer injury, being kicked by another horse or colliding with a cross-country jump. If your horse twists the wrong way in a canter depart and bows a tendon, you’re not covered.

Equine Insurance Costs

As with any kind of insurance, premiums vary based on the value of your horse, his workload and care, and his current health.

Mortality insurance costs

When selecting a mortality policy for your  horse, you will need to decide how much coverage you actually need. Basically the question you want to answer is “How much would it cost to buy another horse similar to mine?” Things to factor in include:

• purchase price
• training
• competitive record
• breeding record
• appraisals
• market comparison

Rates depend on several factors, including the horse’s current value, age, sex, breed and discipline. Annual premiums typically cost from 2% to 4% of your horse’s value. Most companies will charge a minumum  of $150 per year.

Medical/surgical insurance costs

Most providers offer several different major medical/surgical policies, which are available for flat rates determined by the coverage limit (typically $5,000 to $10,000), the deductible (typically $150 to $250), and the details of the coverage. Cost does not vary for each particular horse and is usually between $150-250  a year.

You can save money on medical coverage by opting for a slightly cheaper “surgical-only” policy, which typically covers only the costs of surgery and postoperative care. These policies frequently will not cover any diagnostic work or hospital costs that occur before surgery.

Weigh In

This little bit of research has been very eye opening for me. I don’t blink an eye about insuring my investment in my car or my house, or even myself! After looking at the benefits and costs of equine insurance, I think this might just be a very real possibility for me and Ace. While the $25 a month premiums aren’t prohibitively expensive, the (hopefully hypothetical) need for a colic surgery down the road might be.

So, what do you think? Do you pay for any kind of insurance on your horse? Why? If not, why not? And after learning more, would you consider it?