Buying a horse that had a loss of use claim?

[fastnfurious]

No amount of googling seems to address this so I was hoping COTH could share their knowledge. I’m looking at buying a horse that the seller purchased from an insurance company. The insurance company had possessed the horse after a loss of use claim was filed and paid out, however the horse is now sound, passed a PPE and is in regular work.

Without getting into too many details, this is a VERY nice horse- previously sold for a large sum of money, and is still young with a long show career ahead of it. All of that being said, does anyone know the ramifications of buying/owning a horse that had loss of use claimed on it? I’m assuming it will never be able to be insured again, however I’ve heard that this may be possible if the name is changed (a little sketchy I know…). This is a chance for me to own a horse that under normal circumstances I could never afford, but need to go into this thinking rationally!

Any opinions appreciated- even if you’re telling me to stay away with a ten foot pole!

[fordtraktor]

@fastnfurious;7599209

however I’ve heard that this may be possible if the name is changed (a little sketchy I know…).

Don’t do that. It’s called “insurance fraud” and it’s probably a felony for the amount the horse is likely worth.

Buy the horse if you want, insure it only if the company will with full disclosure – if not, you will have to put some money in the bank for a rainy day and roll the dice like the rest of us who don’t think insurance is worth the $$ in the long run. I have had as many as 8 horses for 25 years and never had insurance. In the long run I have been ahead, though goodness knows I have spent enough at the vet’s over time. Just not as much as I would have paying premiums.

[poltroon]

If it’s a nice horse and it appears sound now with full history disclosed, I wouldn’t be put off by the prior claim.

[findeight]

If you like the horse and it is now sound with good prospects of remaining so. Get him. Just be careful, really careful about the vet you select and a PPE.

Insurance is nice but many, if not most, horse owners get along fine without it and have for thousands of years. Put some money aside every month against emergencies.

Just as an aside, this is why some insurance companies require loss of use claimants to euth the animal. They don’t want to pay out and see the claimant profit from both the loss of use payout and later sale of an animal for the purpose it was declared unusable. Kind of doubt most insurance companies would take it on even for just MM. Of course you could just lie…doesn’t bother some.

[PhoenixFarm]

I’ve never bought one, but I was given one as part if the settlement of a loss of use claim (owners took a 50% of value payout in exchange for placing the horse with an unrelated third party–I had to send notarized affidavits to the insurance company).

He worked as the worlds greatest school horse for me for 7 years, before passing away last fall. He was soundish–had great days and bad days, and I never jumped him. He got previcox and a light schedule when he was ouchy, but generally got ridden 4-5 days a week. He died of something unrelated to his insurance claim.

First off, I’d make sure the stellar has the right to sell him. I could not have sold my horse by the terms of the settlement, though I could have given him away. Second, I would want complete vet records of the condition which caused the loss of use claim and I would want them examined by my vet, no matter the PPE results. Third, there is a specific question in every equine insurance application about any claims paid out on the horse in the past, if you answer it falsely, name change or no, you are committing insurance fraud. Period.

I loved my horse and would do it again–but I can’t say I’d buy one as a show prospect.

[GoForAGallop]

[QUOTE=findeight;7599231]

Just as an aside, this is why some insurance companies require loss of use claimants to euth the animal. They don’t want to pay out and see the claimant profit from both the loss of use payout and later sale of an animal for the purpose it was declared unusable. Kind of doubt most insurance companies would take it on even for just MM. Of course you could just lie…doesn’t bother some.[/QUOTE]

The owner did not benefit twice. The insurance company took ownership of the horse, and then likely sold it on.

[findeight]

[QUOTE=GoForAGallop;7599238]
The owner did not benefit twice. The insurance company took ownership of the horse, and then likely sold it on.[/QUOTE]

Oooops, my bad. But some insurance companies have required euth instead of taking possession and paying to keep it until sold on top of the payout. Google Cigar. He’s not the only one I am familiar with.

[gottagrey]

buying a horse is always a risk - you can have one that passed the vet w/ flying colors only to have something happen. A friend bought a 4 y/r passed the vet - she had that horse for 2.5 years and I think he was sound maybe 2 months out that time… I rode a “sale” horse that never passed flex test, had a little something on her xrays - needless to say I got to ride that mare for 10 years lol she had some off days but they were rare.

In the OP’s situation depending on the nature of the loss of use claim - it could be that horse had a injury of sorts, owner’s had Loss of Use on it and didn’t want to be bothered w/ a long rehab

[fastnfurious]

[QUOTE=gottagrey;7599311]

In the OP’s situation depending on the nature of the loss of use claim - it could be that horse had a injury of sorts, owner’s had Loss of Use on it and didn’t want to be bothered w/ a long rehab[/QUOTE]

this is exactly what happened- purchased the horse for a ton of money (too much honestly) and they had a way out so they took it.

all great comments and points and will definitely avoid committing insurance fraud! I’m not a huge fan of insuring horses anyway- since MM is great until they stop insuring entire legs (even if injuries are completely unrelated) and loss of use is incredibly expensive, but wasn’t sure what the general consensus was for others. I guess if I buy him and down the road want to sell him, some buyers may exclude themselves if they can’t insure him but there will be others who are fine taking that risk and want to avoid premiums anyway.

I will work to get all documentation on previous injury and be sure that my vet goes through it.

Thanks!

[DMK]

just to clarify, if you want to change the name, nothing should prohibit that. Just don’t change his history!

Also you may be able to insure him for mortality and even major med, just with an exclusion for the condition that led to loss of use. That isn’t any different from a horse NOT having LOU and then having suspensory issues. He’s generally still insurable, just not that leg/suspensory.

[Appsolute]

[QUOTE=findeight;7599250]
Oooops, my bad. But some insurance companies have required euth instead of taking possession and paying to keep it until sold on top of the payout. Google Cigar. He’s not the only one I am familiar with.[/QUOTE]

Can you elaborate or provide links? I googled Cigar, and accourding to Wikipedia, and the Kentucky horse park, he is living in the Hall of Champions at KHP.

http://www.kyhorsepark.com/equine-theme-park/walking-barn-tour/hall-champions/cigar

Yes, he is infertile, which I am sure impacted his insurance policy in some way. But I see nothing about the insurance company euthanizing him.

I could understand insurance companies euthanizing horses which they take possession of due to loss of use - which have poor prognosis, or are otherwise “worthless” and thus, the company can’t recoup any losses from the sale of the horse etc (it is a for profit business after all).

I have never had “loss of use” insurance, but I wonder if it is like car insurance - if you car is totaled, you can usually opt for a full pay out, OR to be paid a lesser amount, and keep the car with a salvage title.

[ybiaw]

Kind of OT and sorry to derail a bit but why did they not geld Cigar if he’s infertile?

[fastnfurious]

[QUOTE=Appsolute;7599474]

I have never had “loss of use” insurance, but I wonder if it is like car insurance - if you car is totaled, you can usually opt for a full pay out, OR to be paid a lesser amount, and keep the car with a salvage title.[/QUOTE]

Not sure if this is always the case but I know for a fact that in this particular case the payout was about 80% and they had the option to keep the horse (and not sell it) or to turn him over to the insurance company.

[gottagrey]

you might still be able to get horse fully insured if the injury is over X amount of time or could opt for mortality and surgical only and that way you’re covered if something happens like a colic. i would check to see if surgery would include an extensive laceration type thing.

[Show_boots]

Get a ppe, top to bottom, and get multiple opinions on how well the injury that resulted in a loss of use healed up and what the future prognosis is. This needs to be done from the very best, (a well known sporthorse vet) and I’d look into consulting with another. and from a vet you trust, that is not affiliated with the seller. You need to hear from the horses mouth why exactly they elected to do the loss of use vs rehab especially due to his injury. If you can speak with the vet who first treated the animal and who signed off on the insurance forms do so.

I know one loss of use horse, who the insurance company took, and became a pasture puff. The vet who had been caring for the horse through the injury, who is a very well regarded sporthorse vet said in his opinion putting a person on the animal ever again was not something he would ever suggest. The animal would be sound again but in the event he reinjured himself with a rider on his back, in his opinion it wasn’t worth the risk.

On insuring him in the future you need to be truthful and disclose everything and if you go to resell him you need to disclose it. Especially with the horse world being so small the insurance provider and future buyer will not be too happy, and would likely have grounds to come after you if they hear it from others.

[findeight]

Cigars owner, Mr Paulson fought the insurance company’s decision to euth him all the way to the Ky state legislature, they wouldn’t even let Mr P buy him back. Quite the dust up before it was settled and Cigar was donated to the KHP.

[Appsolute]

Thanks for the clarification findeight!

[Cindyg]

I know nothing about the legalities or even the practicalities, but this is how I got my first horse too, back in about 1972. He was a quality of horse I could never have otherwise gotten.

[fourmares]

There was one multiple year end champion A/O horse who had many many championships at Indio who was picked up in just such a purchase (prior to all the championships). I don’t know if that is common knowledge, so I won’t out the horse… I think it is common knowledge, but I’m not sure… very nice horse.

[TullyMars]

When I lived in England the loss of use horses had a very large freeze brand placed on the saddle area of the back on the left hand side. It was a letter “L” in a circle to denote the horse had been involved in a loss of use situation. It also had a multiple digit number for correlating to what claim. Made sure that they were not sold into situations without awareness.