Wednesday, October 21, 2015

The Insurance Question

The Germany trip is getting closer, and my to-do list is (slowly) getting checked off.  Some things are easy (get new gloves that don't smell like dead rats).  Some things are harder (get a haircut).  Why scheduling and actually getting a haircut is an insurmountable task for me, I don't know.  but it is.

Also on that list is getting my ducks in a row for an insurance policy that's ready to bind asap.

In all likelihood, even if we find a magical unicorn beast that we love, the deal will probably not be finalized until I'm back in the states. But if it is.... I want to have an insurance policy ready to bind.  Immediately.

Looming in the back of my mind is a friend bought a spectacular horse overseas only to have her arrive with a career ending suspensory injury.  Whether it occurred before or during transit, she'll never know, but the horse wasn't insured during travel and everyone was sad. 

You might remember that Prairie is also not insured.  Not ideal when dealing with soft tissue injuries... but formerly my "herd" was large enough that I consistently beat the annual premiums by paying my own vet bills and I have always carried a "rainy day vet fund" for emergencies.

Now, with a diminished herd of one, a potentially expensive horse purchase, and the taste of freshly written checks to the vet in my mouth - the new horse will for sure be insured. 

The question is - for what and how much.

How do I love thee, let me count the ways.... in dollars.

For those who haven't dabbled in the insurance realm, most horse owners are primarily concerned with acquiring major medical coverage.  Insurance companies are smart, and know that there is NO MONEY to be made betting on the chance that horses might stay sound (hahahahahaha), so medical coverage is only offered (to my knowledge) on top of mortality coverage.  So mortality becomes your primary policy, and medical is a box to check on top of it. 

Mortality seems to have a fairly standard going rate of 3.5% of insured value for a competitive sport horse (or $3,500 for a $100k horse). I'm using a $100k valuation because math is really easy that way. 

Medical is relatively cheap, and seems to vary from $400-$1000 depending on your state, co-pay and annual limit options.  in Washington, for a $100k horse, no co-pay, higher deductible and a $15,000 limit it is about $500.

However, since lots of owners seem to use mortality as a stepping stone to medical, many choose to under-value their horse in order to lower annual premiums.  Many I've spoken to operate under the assumption that while an accident resulting in death is not that likely.... budget crippling vet bills are almost a certainty.

So, why would you want to properly represent your horse's market value?  Well, if you are adding "Loss of Use" coverage, which exists to reimburse (part) of your horse's value if something happens prevents them from doing their job (let's say jumping) but doesn't kill them (like, let's say a soft tissue injury...). 

The ins and outs of Loss of Use vary from agency to agency, but typically they cost between 2% and 4% of insured value and most pay out between 50% and 65% of your horse's insured value if the claim is honored.  Some have clauses that allow the insurance company to become the legal owner of the horse, and others offer a lower payout that doesn't require you turn over your horse....

I have heard wildly different stories about Loss of Use claims.  Some say the policies are a money pit and it's nearly impossible to get the insurance companies to pay out (which I understand..) and others say that it has been what's allowed them to retire beloved partners while still providing some shopping money for a replacement...

I have a personal friend who got the Loss of Use payout on her eventer - only to have him return to competition soundness (several) years later and enjoy a second career at the lower levels...

I have also heard stories where horses were NOT sound for their upper level jobs, but could still perform at 2'6" so the insurance companies declined claims stating the horse was still a "jumper."  (this makes sense to me).

So it's all a matter of how you like to spend your money and where your anxiety rests at night. 

In general, my family LOVES insurance.  We insure everything, sometimes more than once!  We certainly aren't good enough to use it as an investment strategy, but we mostly operate under the assumption that you should buy as much insurance as you can possibly stand. 

So, to take this back to horses... let's look at what that might be. 

A dreamy $100k pony comes home with a $3,500 mortality policy, with an extra $500 for a medical policy... The company I'm currently thinking I will go with offers limited Loss of Use at a 2% rate, which is another $2,000 annually (providing a $60k payout).  That's $6,000 a year for fairly extensive coverage - a check that makes me choke a little bit to think about writing.  (of course, the total cost for a $50k horse drops to $3,250, a $20k horse to $1,800...)

But let's pretend you have a magical horse who never gets hurt and so you hardly utilize your medical coverage on a regular basis.  (if you find this horse, please tell me).  Even assuming no benefit from the medical coverage, you'd still have to pay 10 years of premiums, before you had put more in than you would potentially get out in a Loss of Use claim. (and that assumes 10 years of no career ending injuries).


I know there are horses out there who manage careers much longer than that, but sadly I haven't had one of those since my pony back in middle school. 

So I'd love to hear if anyone has had any good or bad experiences with Loss of Use.  I'm still very much on the fence as to whether or not it's something that will offer peace of mind or if it's unlikely to ever be utilized...


  1. I've only heard bad and no experience myself. Let us know what you hear. You are the front line for most of us lol

  2. No personal experience, but only heard bad things honestly. I used to do mortality + surgery on Simon, but it was a small premium. I've never done major medical.

  3. I did mortality + major medical for Fiction for a while but I ended up paying more per year just for the insurance than I did in vet bills, so I dropped it to concentrate on other things. Not sure about loss of use though. That's a hefty sum of cash to be putting out per year o.O

  4. No experience with Loss of use, but always carry medical and mortality, it's been a huge help with vet bills more than once. I insure for a very modest amount but he's not a particularly fancy valuable beast to anyone but me :)

  5. I've only heard negative things about loss of use, but I don't really run in circles where that's a thing. So. No help here.

  6. Im interested to read responses... I have been struggling to know how and what to insure Henry with... I so need to just insure him for something!

  7. I have no experience with loss of use because my mare only cost me $1 so loss of use isn't even in my realm of possibility, and like SB I don't run in circles where that's a thing either. I only know one other person IRL that has insured their horse (which never ceases to amaze me because it is so worth having, especially if a person isn't uber-wealthy.) However, my mare has been insured for mortality + major medical/surgical for the last 3 years and my insurance has paid out close to $7k during that time to cover all of her injuries and treatments. That's exactly what I wanted and needed. Well worth the $350 yearly premium I pay for it. For others reading, my mare is covered for up to $7500 yearly in major medical/surgical, with an additional $500 for colic surgery specifically because she has never colicked. I can always bump up that MM/S coverage to $10,000 at renewal if I wanted to. Her mortality coverage is only for $1200 and I could bump up her value based on her current competition record, but I haven't because my premium would go up too. I have a $300 deductible per incident and farm calls/exams and routine vet visits (like vaccines and dental floating) aren't covered but everything else (x-rays, ultrasound, shockwave, hospitalization, surgery, medications required for treating the injury, etc, etc, etc) is covered.

  8. I also have no experience with loss of use personally, but a friend was denied her loss of use claim. She did the adult high jumpers and her horse was in a tragic trailer accident and now has back issues. While she can still ride her guy, trail ride, light ring work, and low jumps, she will never be able to compete like she was. Claim was denied.

    I am thankful I have my horse insured for major medical. I keep my mortality at a minimum to keep premium down. My insurance has paid me $7500 this year alone for my guys suspensory branch injury. Surgery, stem cells, and rechecks, all covered. Only money out of my pocket was my deductible.

  9. We don't do loss of use. It's expensive and hard to get unless the horse is young with squeaky clean xrays. Since my mare was 9 yrs old and jumping 1.45m, squeaky clean X-rays aren't typical. I have my 2 jumpers insured for major medical and mortality. My gelding is insured for a decent amount of money and they require a competition record each year when I renew my policy. I definitely believe in insuring anything over $50,000. However, mine aren't insured for a ton of money, just what I paid for them +import costs.

  10. Playing catch up here and while I'm afraid I cannot comment on the insurance policy offers stateside. I have had both my girls shipped internationally. Admittedly not as far as you're hoping to ship as mine stayed within Europe.
    However the reason I am telling you this is because the transport company I used to get Kika from Ireland to Luxembourg allowed me to take out a short period insurance for the amount of time she'd be travelling.
    If you want to drop me an email at Aoife(dot)smada(at)gmail(dot)com i will gladly give you the contact info for the transporter i used to move Kika. They are a big business and I'm sure if they don't ship to USA themselves then will be able to point you in the direction of someone they recommend who would offer similar services.

    When I shipped Nancy i had already taken out an individual insurance policy for her prior to her transport so didn't use the short period option the second time.

    As i said please do drop me an email and I'll answer any and all questions to the best of my ability

  11. I have my filly insured. I've insured a couple horses in the past. I jumped in early with this horse. She was free to me but I was able to substantiate with show record (region and national champions and reserves) as well as full and half siblings who sold for more than a little bit, that she as worth $10000 as a mortality claim. I will likely raise that amount on renewal next year as she is currently being started under saddle and it would take double that to replace her. That said, I bought mortality not because it was required, but because I was told that should I have her in surgery (covered under the $7500 MM/S I carry on her) that if she were to pass away during surgery, if there was no mortality it would no longer be a payable MM/S. That said, I'd also like to (monetarily at least) be able to replace her when I'm ready should he worst case scenario occur.


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