By JUMP MEDIA
Anyone who owns horses knows they are an expensive investment.
Insurance companies share the financial risk of horse ownership with their insureds (the horse owners) by providing reimbursement on a full mortality policy up to the insured value for death, theft, and authorized euthanasia, or reimbursement for major medical treatments.
When purchasing or leasing a new horse, the purchase or lease price is used as the basis for justification of value in determining the initial insured value.
Over time, the use and value of your horse may change due to show results, a change in career, age, or injury. As a part of sharing the risk of horse ownership with the owner, insurance policies require that the insurance agent is notified at the time of any change in the career or use of the horse. These instances include, for example, when a dressage horse starts jumping, a horse is used for breeding, a show jumper begins schooling over cross-country courses, an eventing horse moves to upper levels, or a hunter steps down to a lower fence height.
It is important to communicate with your insurance agent about your horse’s career changes to ensure you’re receiving the best coverage for your horse’s current situation.
We spoke with Laura Connaway of Connaway & Associates Equine Insurance Services, Inc., about the most frequently asked questions when it comes to adjusting the insured value of a horse. Read on for Laura’s insights.
Question: Why is the market value of my horse important when it comes to equine insurance?
Answer: To recognize the owner’s financial investment in a horse, it’s advisable to insure the horse at its current market value, which is the amount the horse would be expected to sell for on the open market. As mentioned above, when determining the insured value for a new purchase or lease, the purchase or lease price sets the current market value — therefore the insured value — for a full mortality horse insurance policy.
After purchase, the horse may increase in value due to a successful competition record, and an increase in the insured value may be warranted. Conversely, if a horse is not shown or has a less-than-stellar show record, or in the case of serious injury, the insurance underwriters may suggest a decrease in the insured value when the policy renews.
Question: I bought my horse a year ago and have shown him very successfully. Due to his success, I would like to increase his insured value. What do I need to do?
Answer: Congratulations on your horse’s success! If a horse is having success beyond the level it was showing at the time of purchase, the owner should contact their agent to request an underwriter review of the horse’s value based on the show results.
Question: My performance hunter is getting older and less competitive at this level and needs to step down to the adult hunters. He’s an easy ride and will take care of an amateur. Will this step down decrease his value?
Answer: Not necessarily. While a reduced fence height might seem to mean its value would go down, it may, in fact, make that horse more in demand and, therefore, increase its market value. For example, a horse may not have the exquisite style to shine in the 3’6” performance hunters but may be a very steady and forgiving 3’ hunter. Due to the depth of demand for steady and forgiving 3’ hunters, the market value of the horse may increase, which the market would reflect in the purchase or lease price.
Question: I am no longer showing my older horse. I am still riding her and want her to have medical coverage in case of an accident or colic that requires surgery, but I would like to reduce the cost of insurance. What are my options?
Answer: You can reduce the full mortality value to reduce costs. The insurance carriers have very cost-effective colic and surgical options for horses of any value.
Question: My show jumping mare sustained a career-ending injury. She is very well-bred, and I plan to use her as a broodmare. How do I adjust her coverage for her new career?
Answer: Talk to your agent to discuss your needs regarding full mortality and medical coverage for your mare in her new career. Your agent will present your request to the insurance underwriter to review for acceptance.
Horses may experience multiple career changes throughout their lifetime. Good communication with a reputable insurance agent and an ongoing plan to keep them abreast of any career changes or changes in condition are essential ways to protect your investment.
We all hope our horses have long careers and feel successful and cherished at every level of competition.
Therefore, it is vital to shop around with a trustworthy agency to make sure your insurance is working as hard as possible for you and offering maximum protection for your investment and your equine partner.
