A friend recently asked me about my horse insurance. I told her that horse insurance, like all insurance, is one of those things that is really annoying (paying premiums, etc) until you need it. Once you need it, you are very grateful to have it and it can greatly reduce stress and financial hardship in an otherwise difficult situation.
I have owned 3 horses; one that was given to me, one that I paid just under $10,000 for and one who, let’s just say I paid a lot more than $10,000 for. Regardless of purchase price, I insured all of these horses for some amount of mortality insurance and major medical coverage. In this post, I want to explain the pros and cons of obtaining horse insurance so my readers (like my friend) can make an informed decision about insuring their horses BEFORE the insurance is needed.
Why insure your horse? Does it make sense for you?
I believe that insuring a horse for its value should it die (mortality insurance) is worthwhile if, in the event your horse did die you’d have trouble coming up with the money to replace him. In such a case, the insurance money could allow you to replace your partner with a new horse. Another reason to obtain life insurance for your horse is that most, if not all, equine insurance companies require that horses be insured for some amount BEFORE they will insure the horse for major medical. So if you want major medical, you need some life coverage first.
As for major medical coverage for horses, I think it’s a type of coverage that most recreational, non-professional horse owners and their horses can benefit from.
Insuring horses makes the most sense if you own one horse or a very small number of animals. This is because you have to pay a premium on each horse and if you insure the horses for a substantial amount, those premiums can add up quickly. If you own more than a small number of horses, it is impossible to predict which one will get sick or injured or die. Therefore in such a case, it might be more useful to do what I call “self-insuring” your horses. Instead of using an insurance company, you set aside a fixed amount of money ever y month that is designated specifically for unforeseen horse medical expenses or to replace a horse in the event of its unexpected death. If you choose this method, instead of paying premiums on say, 5 different horses for life plus $10,000 worth of catastrophic medical coverage(these premiums would easily add up to several thousand dollars) you put the money you would have paid in premiums into a savings account. Now, no matter which horse requires medical treatment, you can use your “self-insurance” money to pay.
However, if you do own one horse or a small number of horses, getting some mortality coverage and major medical coverage for your horses is a good idea.
Mortality insurance will pay you a set amount you agree upon beforehand in the event that your horse dies. Generally, the death must be accidental. As sick as it sounds, there have been cases of valuable show horses killed for insurance money. What you insure your horse for in mortality does not have to be for the horse’s purchase price. You can insure a horse for more or less than what you paid for him. However, under certain circumstances, you need to prove the value of the horse to get the insurance company to pay out. Just because you insure the horse for, say $10,000 doesn’t mean they will pay out $10,000 in the event of his death. You may need to prove the horse’s value through an appraisal, show records, etc.
Major Medical Coverage
Major medical coverage is the main reason I insure my horses and the coverage that is used most frequently. As the name suggests, major medical coverage is not for routine veterinary expenses. Major medical coverage also (generally) will not cover degenerative problems such as arthritis-related problems/lameness or some degenerative neurological conditions like Wobbler’s Syndrome. It will not cover routine maintenance like hock injections. Each insurance company and policy is different in how it works and what it includes and excludes for covered conditions, so it is very important to read your policy before signing it and asking questions of your insurer as necessary.
What major medical insurance generally will cover is diagnostics, including advanced diagnostics such as nuclear scintigraphy, MRI, X-rays, and ultrasound. It will cover treatment for non-degenerative injuries (such as a tendon injury, ligament injury, boney injury or fracture) and it will cover illnesses including surgery for colic.
The details: Most Major Medical policies have a relatively high deductible of about $350 per incident, so you won’t use your insurance unless the condition will cost significantly more than that to treat. Not all horses are insurable. If your horse is older or has had a previous medical event such as colic requiring colic surgery, he may not be insurable. Check with your insurance company for details.
Major medical coverage is great to have in the event that your horse gets sick, injured or develops a mystery lameness. I insure my horse for $10,000 per year of major medical coverage. It gives me peace of mind and prevents me from having to consider financial factors as much in the event that he has a medical problem. For example, if I got a phone call from my barn manager right now that my horse was colicking, I know that I could put him on my trailer as quickly as possible and rush him to the clinic for colic surgery, no questions asked. Colic surgery and recovery these days can easily cost $10,000, but I know my insurance will cover it.
Here is another less dramatic example: I know a case of an insured horse that went mildly lame, but got no better over time. The local vet and farrier couldn’t figure it out, so the horse was shipped to a vet clinic that specialized in diagnosing and treating lameness. At the clinic, the vets did a bone scan on the horse to pin point the lameness, then followed up with nerve blocks and x-rays to confirm a diagnosis. The horse’s injury was diagnosed and the horse was prescribed rest, given some medicine, and some shockwave therapy treatments were performed to the affected areas. Thanks to a correct diagnosis and treatment, the horse made a full recovery and continued at its sporting job. The owner’s bill was $6,000 for the clinic visit! However, the owner had the horse insured prior to the incident and paid only her deductible of several hundred dollars for the incident. The owner got a sound, useable horse and did not have to suffer financial hardship to do so.
There is a lot more that can be done for horses these days, when they get sick or injured. Advanced diagnostics and interventions like surgery can be life-saving or career-saving for horses, but often come at a steep price. When deciding if horse insurance is right for you, you have to think about the unthinkable. If your horse became seriously ill or injured, would you be able to afford the care that you wanted to provide to the horse or would the cost be prohibitive for you? If you think that cost would unduly affect decisions about your horse’s care, horse insurance might be just the thing to fill the gap.