Posted 09-Nov-2019 12:12:46
Category: Broadstone Equine
Five Horse Insurance Myths & Misconceptions
As part of Broadstone Equine Insurance Agency, my career has given me the opportunity to travel around the country to events and competitions as diverse as local horse club meetings, national championships, and association conventions. What I most enjoy is meeting horsepeople from all walks of life to hear their opinions when it comes to horse insurance. After countless conversations, combined with more than two decades of experience in the business, I’ve seen a pattern in the types of myths and misconceptions that the average horse owner has when considering their insurance options.
#1) Full Mortality Insurance is Just Too Expensive
Cost is the most common misconception, with the general assumption that insuring the average horse is just too expensive. One of the common comments I hear after calculating a quote for a potential client is, “That’s not as much as I thought it would be.”
The annual premium for a Full Mortality (life insurance and theft) policy on a horse is based on a rate, which is a percentage of the horse’s insured value, and that rate is determined by the horse’s breed, age, and use.
Pro Tip: When looking for a quote, it is very useful to work with an agent that works with more than one insurance company, since this gives them access to competitive rates and coverages.
Broadstone has relationships with five of the top equine insurance carriers in the U.S., which makes us one of the most flexible, competitive agencies in the country. For a Show/Pleasure horse through age 14 and insured for a value of $5,000, the rate for Full Mortality coverage begins at 3%-3.25% of the insured value, for an annual mortality premium of $150-$163. At a $10,000 value, the premium would be $300-$325, and so on.
Rates for Dressage horses range from 2.9%-3%, and Reining and Cutting horses start at 2.99%. For Show Hunter/Jumpers, Barrel Horses, and Roping horses rates start at 3.25% and Eventers start at 3.7%. For a quote, go to the Quote Page.
An extra benefit: The companies that Broadstone works with also offer Full Mortality policies that include up to $5,000 of Emergency Colic surgery (ECS) coverage, at no extra charge, for horses without a history of colic issues.
#2) I Can’t Afford Major Medical/Surgical Coverage
While Full Mortality is your starting point, most people also consider some level of Major Medical/Surgical or Veterinary Services coverage as well (more on the actual coverage in item #4)
Annual coverage limits of $5,000, $7,500, $10,000, $12,500 and $15,000 are available, depending on the insurance company and the horse’s age and insured value, with annual premiums starting at $200 per year and increasing as the coverage limits increase.
The Math: A $5,000 Show/Pleasure horse, age 2-14, insured for Full Mortality and $5,000 Major Medical/Surgical coverage could cost as low as $363 a year. Depending on the company, a $10,000 Dressage horse with $10,000 Veterinary Services coverage could cost as low as $740, with a 4-pay plan option available (down payment of $185).
#3) It’s Too Complicated
The response I often hear after discussing the required paperwork I’ll need from a prospective client is: “Well that’s simple.” For the average sound and healthy horse to be insured for Full Mortality and Major Medical/Surgical, an application from the owner is all that is needed. Vet certificates are often only required if the horse is to be insured for a value higher than $50,000, is older (16 or over), or has a history of health problems.
Applications are available as fillable PDFs that can be electronically completed, signed, and emailed back to us (or faxed or snail mailed). So in a lot of cases, less than five minutes of paperwork and the click of the Send button is all it takes to get coverage in place.
Show Me the Money Payment isn’t required up front, since it is the paperwork and underwriting approval that allows coverage to be bound which then gives you time to make payment to either the insurance company directly or to our office. Payment can be made by check, or most credit or debit cards.
#4) Major Medical/Surgical and Veterinary Services Coverage are Too Restrictive
Often potential clients are concerned these coverages are a bit of a sham, only covering the most catastrophic problems, like colic surgery, and even then, with all sorts of restrictions.
While these coverages won’t take care of your usual maintenance–vaccinations, worming, shoeing, preventative treatments and supplements–they can be invaluable if your horse suffers an injury, illness, lameness, accident or disease during the policy. Common uses for theses coverages include diagnosis and treatment of lamenesses, surgically or medically treated colics (even a colic that only requires medical treatment for a day or two at the vet hospital can still easily run into the thousands of dollars), blunt force traumas and lacerations, gastric ulcers, and diagnosis and treatment of diseases ranging from EPM and Lyme Disease to melanomas and respiratory infections.
When it comes to a major lameness or illness, diagnosis can sometimes be more expensive than the actual treatment. This is where a Major Medical/Surgical or Veterinary Services endorsement can be most useful. Depending on the insurance company, the endorsement generally covers at least a significant portion of the diagnostics for a covered issue, ranging from X-rays and ultrasounds, to even MRIs and bone scans (co-pays or co-insurance may apply, depending on the insurance company -- Broadstone works with two companies that give the option to pay an additional premium to remove a co-insurance on diagnostic expenses -- call for details). Once a diagnosis is made, many treatment options are also covered, with the specifics depending on the company.
Granted, the Major Medical/Surgical or Veterinary Services endorsement isn’t going to cover every veterinary expense, and there are restrictions and exclusions with every company’s coverage wording, but in most cases the coverage will help limit the financial hit that you take, and allow you to concentrate on giving your horse the best care possible.
#5) After I get a policy, if I make a claim the company will raise my rates or refuse to renew my coverage.
In most cases, a claim does not result in a non-renewal of coverage. Underwriters understand bad luck and the nature of horses, and seldom make knee-jerk decisions. In most cases renewal is offered, and rate increases are generally not applied based on a claims history.
Do keep in mind though that horse insurance policies are 12-month term, property/casualty policies and unlike most human health insurance policies, pre-existing conditions can be excluded. This means that if the horse does have a health problem during a policy year, it is possible that an exclusion for that problem will apply to the following year’s policy. That said, most policies include varying types of extensions of coverage that may help protect you for a period of time after the policy expires.
Bonus Point – Quick! Knock on Wood!
My horse has never colicked/taken a lame step/been sick a day in his life, so I don’t need insurance.
Hopefully that streak will continue, but in my experience, most claims happen to horses that previously had stellar health histories. They’ve never coilcked—until the night they end up in surgery. Or they’ve never been lame until the day a pasturemate decides to play a bit rough, or they find the one groundhog hole in their paddock.
With that in mind, putting into perspective all the time, money, and effort that we put into our horses, who we often consider members of our family, and the fact that we insure all our other major investments--trucks, trailers, houses, barns--adding your horse to that list is definitely something to consider.
This piece is intended for general information purposes and is not an example of coverage. For details on rates and coverages, contact Broadstone Equine Insurance Agency at 888-687-8555.
Private Horseowners Liability Insurance