Horse insurance can be a touchy subject. Once the decision has been made to insure the horse how much should it be insured for?
No insurance company will ensure the horse for more than “fair market value” but what exactly does that mean? To start it means the purchase price. If you bought a horse for $5,000 even if it seems a steal to you this is the price that the company will consider as “fair market value”. As the horse progresses through its training it may take on a new value.
Insurance agents will usually consider: training, winnings, or its ability to perform in the breeding shed as things that could increase the horse’s value.
Training is determined as the time that the horse is in full training or the times when a ‘pro’ is actually sitting on the horse. The lessons and clinics that are taken are not considered as training. Although insurance agents may not ask for written documentation regarding the amount of training, if the horse dies, and you want to collect on the policy, be ready to supply the information to back up the training numbers.
The winnings, whether amount of money earned or placings and championships at horse shows can help determine the market value of the horse. Some times you find a fancy horse, diamond in the rough type, and purchase it for a really cheap price. It can only be insured for the purchase price because it is un-proven. While the horse may be worth more because it has potential, it has not achieved the necessary marks or placing to make its value worth more. This should be brought to the attention of the insurer. The owner and the agent must agree on the necessary requirements to have the horse insured at a higher price.
To get the horse insured at a higher value the agent may require that the horse get scores of 65% at a fourth level dressage test, or win a championship at a green hunter division. Once the requirement is met then the insurance price will increase. Make sure you have an open line of communication with your agent so that policies and prices can be discussed.
If you have a foal to insure the rule of thumb is two times the stud fee. This means if the stud fee is $1500 the insured cost could be $3000. Also taken into consideration are show winnings and sales records of any siblings.
Remember that insurance is purchased to protect your horse. Do not be afraid to call your agent or make a claim. It is best to contact your agent if the vet is called out, even for minor illnesses or injuries. This way if complications arise, the agent is knowledgeable of the condition and can help negotiate through the insurance claim process