Equine Insurance for Horse Owners

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You've finally found a horse that's working for you. A horse you can count on. You've either spent a good deal of time getting him to the point he's at, or you've spent a good deal of your hard-earned money to find one that fits you. Bottom line: if you've got a good horse, you've got a lot invested in him. Good horses don't just happen.

So why not protect your horse with insurance should anything happen? Equine mortality insurance is one of several types of horse insurance now available to horse owners. Be financially prepared when injuries or even death affect you and your horse.

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Equine insurance is not something new, but it's not an industry standard, either. Some ropers and rodeo hands carry insurance and others do not.

Reigning Wrangler NFR Average Champion Chad Masters does, and has experienced the sting of losing an uninsured horse.

"My dad's best friend let me borrow a $20,000 calf horse," he said. "I had him insured the whole time I was roping on him, then we went to the Northwest and I left him at home."

Because he wasn't hauling him and he would just be turned out in the pasture alone, Masters let the insurance go. The horse was healthy for three months. Upon return, he caught the horse and penned him since he would be turning new horses out. Trying to crawl out of the pen, the horse broke his leg.

"Luckily, the guy let me replace that horse with a $5,000 horse because he was a friend of the family," he said. "Still, it cost me $5,000 out of pocket where if I would have kept the insurance, it would have just cost me the premium and he'd have gotten $20,000 back. It was all my fault. I was just lucky he was so good about it and understood that kind of stuff. I don't want things happening like that any more so I make sure I stay on top of the insurance for myself."

Equine Mortality Insurance
Equine mortality insurance is the most standard policy in the industry and the horse can be insured for up to 100 percent of its value. Typically, annual premiums for a rope horse fall between 3.2 and 3.8 percent of the animal's agreed-upon value. When determining value, the burden of proof falls on the owner, so always keep bills of sale, roping results and training invoices.

"Insurance in livestock is very similar to life insurance because it's mortality," said Lyndia Cotton, owner of LCI Livestock Insurance. "The base policy is mortality. Whether it's due to accident, sickness, disease or even destruction due to inhumane suffering. It also includes theft. That's your standard across the board. Now there are other endorsements including colic surgery expense."

Most often set at $3,000, the colic surgery endorsement is becoming more and more standard on policies for the simple fact that horse insurance companies would rather have to pay around $3,000 for a colic surgery claim than a mortality claim.

For insurance purposes, the value of a horse is determined by its purchase price and its performance record. No pre-existing conditions are ever covered and it is a 12-month contract. It's renewable, but the horse has to be reevaluated. Of course, if you're in the market for equine insurance, look closely at exclusions: for example, what's stipulated if your horse requires humane destruction? Assume nothing when you purchase a policy, but do discuss all possibilities thoroughly with your agent.

"On a new purchase, the horse's purchase price is the maximum insurable value at that time. You are not to profit from an insurance policy," Cotton said. "They'll let you increase the value of an animal as long as you can substantiate it through performance records or training costs. With rope horses, we look and see what number roper is winning money on the horse and what roping number he is roping in. You have to look at consistency, that's a key issue."

Cotton, whose Stephenville, Texas, company specializes in the Western disciplines, particularly roping and barrel racing, works with many of the top 15-types in team roping, calf roping, steer roping and barrel racing. In fact, working the professionals gives her a great deal of comfort because the horses they ride are becoming more and more valuable all the time.

"Team roping horses that have been trained for the long haul are worth a lot of money," she said. "The good thing is, if a roper has a horse that really fits him, one that can get him to the top of his game, he's going to tend to take care of that horse because even if it's insured and something happens, he can't just take that money and truly replace that horse."

Contrast that with a race horse that has a different owner, trainer and rider and the insurance companies' willingness to insure rodeo horses does make sense.

While the professionals do tend to take good care of their horses, they are at a higher risk in some situations. For instance, the constant travel that rodeo horses are subject to just increases the chances of accidents. Every week horses are in a different stall. Plus, the sheer intensity of performing their duties can put them at risk for injury.

"For me, it seems like it's hard enough to find a horse I can win on," Masters said. "I raised the two I've got. If I'm winning a lot of money on them and without having a lot of cash around, if something happened to them, I don't know where I would start. Everybody that's got a good horse wants so much for them, so what would you do if you weren't insured? If something did happen to one, at least I would have $20,000 to $30,000 to try to replace them."

Major Medical Insurance
To cover the kinds of accidents that can result in injury or illness but not death, insurance companies have developed policies.

"Most companies also offer an endorsement of major medical surgical coverage to help you pay vet bills due to accident, sickness, disease or surgery that occurs during the policy period," said Cotton. "There are other enhancements you can purchase as well."

From Cotton's perspective, there are two types of clientele for whom she strongly recommends the major medical endorsement: people new to horse ownership and people who travel with their horses regularly.

"The less you know about horse care and the shorter amount of time you've been in the industry, the more I encourage major medical because you don't have the experience to do what the vet tells you on the phone," she said.

For traveling horsemen, the wear and tear on a horse can add up. Plus if there is a need for a vet while on the road, chances are the horse owner won't be acquainted with that vet. When a horse owner can present a policy covering the cost of treating an accident or sickness to a vet no time will be wasted getting the horse the attention it needs.

Plus, having this type of coverage could spare horse owners the decision of whether or not to undertake life-saving veterinary care. If you can't afford it, your horse won't receive it, and the emotional ramifications for you could be significant.

Major medical insurance covers diagnostic testing, surgery and post-operative care and medicines. However, it doesn't cover routine care and vaccinations, deworming, supplements, hock injections and the like. Most companies offer several plans between $5,000 and $10,000 total and there is a deductible per occurrence.

There are also endorsements to cover permanent disability due to injury or illness that prevents the horse from performing his normal event. It's not a common endorsement and is expensive.

Personal Horse Owner Liability
The final piece of the insurance puzzle a horse owner ought to consider is personal horse owner liability coverage.

What happens when you're at a roping, in the parking lot and your horse kicks at a dog running behind it and dents somebody's truck? Worse yet, what if your horse kicks somebody causing damage?

"Personal horse owner liability coverage will protect you should your animal cause bodily injury or damage to someone else," Cotton said. "Such as kicking the mirror off the side of the truck in the parking lot or riding up to someone in the grand entry and your horse kicks and breaks their leg. If a little kid walks up and wants to pet your horse and in the process of you saying no, the horse bites him. You are liable in the United States for the behavior of your animal. If you lose control of your horse coming out of the parking lot or the alley and he runs over somebody, this insurance comes into play and protects you. If you are sued and found liable and responsible due to your negligence, it kicks in and will pay. We've become so much more of a litigious society in the last 10 years. If somebody gets hurt, somebody's to blame and they're going to come after who ever the horse belonged to."

Commercial Liability
Roping producers and horse trainers are another group that is certainly at risk of lawsuit. For big time roping producers, they probably have to have an insurance policy in place to even rent a facility.

"The cost of a policy depends on the size of the arena, how much income is being produced and how many human lives are at exposure," Cotton explained. "Producers now know what they're doing and they have their own safeties. They don't want a claim."

On the other hand, if you rent your arena, or host small ropings or even organized practices at your own arena, a policy should be in place.

"If it's on your own property, if somebody rents it, you should carry a policy," Cotton said. "If somebody gets hurt, they're going to sue and they're going to sue the producer, the person that injured them and the property owner. They're going to name everybody in the lawsuit trying to find the deepest pockets."

Choosing Your Equine Insurance Agent
It is always better to find an agent that specializes in your particular discipline. The agent is usually more familiar with the current formats, organizations and values of animals in the disciplines that they participate in. It is to the insured's advantage to work with an agent that is a rider or†horseman himself, according to Lyndia Cotton, owner of LCI Livestock Insurance.

"My theory is, if I'm a horseman and I'm out there with my trailer at an event among the people I'm insuring, I want to be sure the companies I'm riding with and the claim settlements are top notch," she said. "I don't want to just hide behind a desk."

You need to have a good feeling about the agent after talking with them about your horse. A horse owner has more than a financial investment in the horse. Many have a strong emotional relationship with their animal. The horse owner should recognize the difference between an agent that is simply quoting rates versus an agent that takes time to explain the coverage and discuss comparisons and examples. Be sure to request the information on the quote and coverage be sent to you in writing. Never assume what is covered, get it in writing.

Talking to friends and leaders in your local competitions for references is always a good idea. According to Cotton, here are some questions a horse owner should ask the agent before signing up.

• Will you send me the quote and coverage†information in writing?

• What is the name of the company?

• What is the A.M. Best Rating (A.M. Best is a company whose ratings are recognized as the-benchmark for assessing the financial strength of insurance-related organizations and the credit quality of their obligations) of the company for whom you are quoting me?

• What is the normal time frame for claims payment with the company?

• Do you or the company have a 24-hour toll-free claims number?

• How long have you, as an agent, been writing this type of business?

• Do you have client references that have had claims in the past?