It probably isn’t necessary for every horse owner to insure their horse. If you buy a new Mercedes for $75,000, total it on the way home and have the resources to go out and buy another one, then don’t waste your money insuring your car. Likewise, if you can afford to replace your horse if he dies tonight then you probably don’t need to worry about insuring him. However, if replacing your horse could create a financial pinch on your checkbook, then perhaps you should consider insuring him.
If you decide that insurance on your horse is a good idea, how much do you insure him for and what kinds of coverage do you need?
First, let’s talk about the value of your horse. The premise of insurance is to “bring you back to where you were financially, before the loss of your horse” meaning that it is not replacement cost, or the price someone is willing to pay to buy him from you, but what you have invested in the horse that makes up the value of your horse when it comes to mortality insurance. Insurance is not to win you a profit, just to cover your investment.
If you just purchased the horse, the value is an easy calculation – it’s the purchase price. That is what you have invested in the horse. (Don’t forget to keep the sales receipt and/or a copy of the check for proof of purchase in the event of a loss.)
If you have owned the horse for a little while, or a long time, you can determine the increased value over the original purchase price by adding a percentage of the training fees (typically 50% to account for the training portion, etc in your monthly fee), show records, earnings, breeding record if it is a stallion, etc. Do realize that you do not have to insure your horse for its full purchase price or full value if you are comfortable insuring him for a portion of your investment. Some people insure for what they need to get back to start over in the event they lose their horse. People tend to do this to keep the premium down on the insurance and/or be able to afford Major Medical coverage as well.
On top of the Full Mortality (life insurance) on your horse, you should consider Major Medical Insurance (health insurance). Upwards of 90% of the claims we see in our office are Major Medical claims, and not mortality claims. Horses tend to get sick or hut more than they die. Whether it’s your best friend in the back yard, or your expensive show horse living at the trainer, major medical can make a difference in how you handle a lameness, accident, or sickness situation.
Colic is a good example of how medical bills can add up quickly. For example, your horse colics, your vet says you have to take him to a vet facility immediately for possible surgery. A colic surgery can cost anywhere from $7,000 – $12,000 or more depending on what is wrong, what they have to do, and how serious the condition. If you have Full Mortality insurance on your horse, you are obligated to do what the vet requires in order to preserve the life of your horse, in order to have the mortality claim paid in the event your horse dies from the illness. Major Medical coverage is reimbursement coverage, and will reimburse you for a portion of your expenses. It sure is comforting to know that you have financial back up if you are hit with a situation such as colic, or major injury and you love your horse, and will do what it takes to help him.
Contact Lisa Steller or Allison Trottier with Star H Equine Insurance about Full Mortality and Major Medical. This is just a brief explanation of how these two coverages work. We can go into detail about what the insurance covers.
Star H Equine Insurance office is located in NC and licensed across the United States. Star H specializes in horse farm/ranch property insurance, equine liability products such as Commercial Equine Liability, Care Custody and Control, Event and Club/Association insurance, Personal Horse owners insurance, and Horse Full Mortality and Major Medical insurance. Visit www.starhinsurance.com or call 1-877-827-4480 for more information on horse related insurance products.
* The information provided here is intended to be a brief summary. Please contact Star H Equine Insurance and/or review your policy for more detailed information.
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