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Posted 14-Sep-2023 12:00:13
Category: Broadstone Equine
Tips for Completing the Horse Insurance Application
Completing the application to request insurance on a horse that you own or lease can be a bit confusing, so we have put together the following to help clarify the frequent questions we hear from potential clients.
Question: Proposed/Preferred/Desired Effective Date
Scenarios:
1) You currently own the horse or are currently leasing it
Write ASAP. That way, providing we have everything we need from you and the underwriter approves the coverage, we can start the policy the day we have that approval.
2) You don’t yet own the horse, or haven’t yet started a lease on the horse
Write the expected date of the purchase or the expected start date of the lease. NOTE: If this date changes after you submit the application, notify us immediately so we can determine if the effective date can be amended.
3) If you have a current policy in place on the horse
If you are looking to avoid a lapse in coverage, write the expiration date of your current policy, keeping in mind that depending on the circumstances, we may need several business days for underwriting review, so you want to submit your paperwork as many days in advance as possible (*see the two paragraphs below).
Possible Additional Paperwork: If you have a current policy in place, or have a recently expired policy, the underwriters will require additional paperwork. 1) Loss Runs. Loss runs are a report from the insurance company that currently/previously insured your horse, showing any history of claims – this is something that your current agent will need to get for you; 2) Declaration Pages from the current or recently expired policy. These are the pages that give your name and contact info, policy number and effective dates, and the horse info. You Also want to include any of the pages that show exclusions specific to your horse (if any). We do not need to see any exclusions that are part of the base policy applicable to all policyholders.
Important: Coverage cannot be back dated, so you will want to have all of your completed paperwork to us at least several business days prior to your preferred effective date in order to give time for any follow up questions we might have, and to give underwriting the chance to review, and hopefully approve, the paperwork. Also, keep in mind that applying for coverage is not a guarantee that a policy will be put in place – the underwriters make coverage determinations, and while we receive approval in the vast majority of cases, there are occasions that for various reasons they will decline a risk.
Question: Applicant’s Name/Named Insured/Name
In most cases this should be the legal owner(s) of the horse who is/are 18 years of age or older (if the “owner” is under 18, that person’s parent(s) or legal guardian should be listed as the Named Insured).
If the owner is a business or syndicate, the Named Insured should be the name of the company or syndicate, with specifics given as to the name of the business or syndicate’s contact person and their contact information. Keep in mind that in the event of any claims, any payment made by the insurance company will be made payable to the Named Insured.
Lease Exceptions - Exceptions to this would be naming the Lessee (the person leasing the horse) as the Applicant/Named Insured or in the case of a Lease where the Lessee (the party leasing the horse) is required to insure the horse and has an insurable interest such as being responsible for veterinary expenses if the horse has a medical or surgical claim. NOTE: In these cases, you would want to make sure to name the Owner/Lessor as a Loss Payee (see the Loss Payee section further in this Blog.
Important Note: In the event of a Mortality claim, the insurance company’s claims adjuster will require proof of ownership, including a Bill of Sale. If the name on the Bill of Sale is someone other than the owner you have listed on the insurance policy, this could complicate the claims process. Also, when it comes to ownership of the horse, the adjusters typically do not take into consideration who is named as owner on the registration paperwork (if the horse is registered).
COVERAGE OPTIONS
Equine Mortality
If there is a Specified Perils or Limit Mortality option on the application, do not choose that unless you are only interested in a very limited type of life insurance that covers only if the horse dies from a specific list of causes, such as fire, flood, lightning. Typically, the only clients that choose that option do so because the horse is no longer eligible for the regular Mortality coverage due to the horse’s age – talk to your agent for details on this coverage if you think you are interested.
Most of our clients choose the Full Mortality or regular Mortality coverage, which is much more comprehensive life insurance coverage. Important NOTE: You must have a Full/Regular Mortality policy in place in order to add any types of Medical and/or Surgical endorsement options.
Medical and Surgical Endorsements
Each insurance company offers a variety of Medical and/or Surgical endorsements that can be added to the Mortality policy (these coverages are not available on their own), depending on the horse’s age, breed, use, and insured value. By the time you are completing the application you should have an idea from an agent as to what options your horse is eligible for, and will want to mark those box(es).
HORSE INFORMATION
Question: Date of Birth/Year Foaled
If possible, enter this date as xx/xx/xxxx. This is especially important for foals and weanlings, as rates depend on their exact age by number of days old. If you are not sure of the exact birthdate for yearlings and older, please provide Month and Year. If the horse is older than two years, just the year is sufficient.
Important: If you are not sure of the horse’s age and do not have official documentation such as registration paperwork and/or a passport for your horse, or for Jockey Club registered Thoroughbreds a lip tattoo that can be read, please disclose that on the application, and provide as much information as possible to substantiate what you believe is the horse’s age. NOTE: The age written on a Coggins certificate is not proof of age. A written statement from a veterinarian or equine dentist will be useful for underwriting review, keeping in mind that if the vet writes something like “horse is between 12 – 16 years old”, the underwriters will use the oldest age from that range. Also, make sure that you take a look at the Pre-Purchase Exam or Veterinary Exam report (if you had one done) to see what the vet has written in as the horse’s age. If the vet has written that your horse is 15 on that paperwork, and you have written the age as 10 on the application, the underwriter will go with the information provided by the vet.
Note: For insurance purposes, January 1st of the horse’s birth year is considered the birthdate for ALL horses not born in the current year. For example, if your horse was born August 1, 2010, and the current date is September 1, 2023, your horse will be considered 13 years old for the purposes of the insurance policy, even though technically he has not yet reached his 13th birthday. Also, the horse will be considered that age for the entire 12-month policy term – so if your policy runs from September 1, 2023-September 1, 2024, the horse will be considered 13 during that time period. If you were to renew your policy on September 1, 2024, the horse would then be considered 14 for that policy year.
Question: Requested Limit of Insurance/Requested Mortality Limit/Amount Insured – this is the value you would like to insure the horse for in the event of its death. If the horse is a new purchase, the value in this box cannot be higher than the purchase price, unless you want to add commission and/or cost of flight from Europe (if applicable), in which case you need to provide documentation of those amounts.
NOTE: Underwriting will only consider certain transit and/or quarantine costs as part of the insured value, and receipts showing expenses are required. You should discuss this with an agent.
Regarding Value in general – if the horse is a new purchase, you will not be able to insure it for more than the purchase price that you paid. If you have owned the horse for a while and are looking to insure for a value more than the purchase price, you will be required to provide value substantiation. You may also be required to provide value substantiation if you have owned the horse for a number of years, regardless of the value you have requested, as the underwriters will want to make sure that the horse is still actively in work, being ridden or driven, competing, etc.
If the horse was a recent gift, or recently adopted from a rescue, it will depend on the underwriter as to what value they will consider. Talk to your agent regarding options.
For more details regarding Insured Values, check out this BLOG POST
Question: Use
If your horse has multiple uses, list them all, even if you only school these disciplines, do them just for fun, and/or do not compete in them. If your horse is a show hunter or show jumper, but you occasionally school over cross-country fences or compete in eventing competitions, or go out with the local hunt, then you would want to also include eventing or fox hunting (depending on your activities) as your horse’s Use. Or if you normally only trail ride, but occasionally jump over some obstacles, or take the horse out driving, or the horse is pregnant or also used as a breeding stallion, you need to note that your horse is used for Jumping, Driving, or Breeding (or whatever other use/discipline). This is very important, because 1) the underwriter needs to know all uses in order to determine if they will offer coverage and 2) if your horse is being used, even if just occasionally, for a discipline or Use that you have not listed on the application, if you have a claim, it may be denied.
Question: Date Purchased
Please provide this date as xx/xx/xxxx if possible. If it has been a while since you purchased the horse and you cannot remember the exact date, just month and year should suffice.
Other Common Questions on Applications
Was a Pre-Purchase Exam done?
If you had a Pre-Purchase Exam (PPE), you only need to submit a copy to us if we request it. That said, some insurance companies will require a copy for all new purchases, and most require a copy of the PPE report for all new imports or horses currently overseas. If you only had an insurance exam or health certificate done, do not mark ‘Yes’ to questions asking about a PPE or if the seller had one six months ago or if the lessor had one done – only mark ‘Yes’ to the question if you had/paid for a pre-purchase exam.
Has the horse had any diagnostic ultrasounds/radiographs/bone scans?
This question is referring to these types of imaging if they were for something other than standard pre-purchase exam.
How far is the horse’s location from the closest equine vet?
Miles to the closest equine vet does not need to be the vet you routinely use. You can instead give the mileage to the closest equine vet in the area, regardless of whether or not you usually work with that vet.
Is the horse currently insured or has been previously insured by you? Provide details if you have a current policy on the horse, or if you had a previous policy on this horse.
Ancestors known to carry HYPP/Has the horse been tested for HYPP?
HYPP is a condition specific to Quarter Horses, so if your horse is not a QH, you should write in N/A. If the horse is a Quarter Horse, please answers these questions.
Are you the Sole Owner of the Horse/What Percentage of Interest do you (or others) have in the horse?
If you do not have 100% ownership in the horse, you must give all details regarding what percentage of ownership you have in the horse, and the names and addresses of any other owners and their percentage of ownership.
Is the Horse being Leased/On Trial/Financed?
You must disclose if the horse is being Leased, and what party you are in the Lease (Lessor would be the party who owns the horse and is leasing it to another party; Lessee would be the person/party leasing the horse). You will be required to provide a signed copy of the Lease Agreement, which must list all parties to the lease, the effective dates of the lease, amount the horse is to be insured for, as well as coverages required.
If the horse is on trial, you must give those details, including the Trial Agreement, which similarly to the Lease Agreement must list all parties to the trial agreement, the effective dates of the trial, amount the horse is to be insured for, as well as coverages required.
If the horse is being financed, you must give the name and address of the party/institution that is providing the financing.
Loss Payee
A Loss Payee would be a party other than the Applicant that has an insurable interest in the horse. To have an insurable interest, the party needs to be at risk for suffering a financial hardship in the event of damage or loss of that insured horse. The Loss Payee must be at least 18 years old.
Health Related Questions – General Note
If you have answered “yes” to any of the health questions on the application, make sure to provide additional information including date of diagnosis, treatment given, prognosis, and current status.
SIGNATURE & DATE
Please make sure to both sign and date the application (this can usually be done electronically). These are both necessary, and paperwork cannot be processed without it.
For more information on equine insurance coverages, please check out our other Blog entries, and visit our PROTECT YOUR HORSE and FAQ pages. To find the Applications and other required paperwork as fillable PDFs, click on the FORMS page.
**These blogs are for basic information purposes only, and do not constitute advice from Broadstone Equine Insurance Agency, a division of Marshall and Sterling Insurance, or its affiliates. Contact our office directly at 888-687-8555 or info@BroadstoneEquine.com to contact an agent for complete and current information regarding all coverages.
Related Entries:
Understanding Insurable Interest in Horse Insurance Policies: Leases, Horses on Trial, Purchases over Time