Long story short - leased out our horse, he is currrently off with medical issues. We are taking the horse back to rehab him, just found out that the trainer cancelled the insurance on him 10 days ago without giving us any notice. We had planned on taking over the insurance - now we have nothing. Do we have any recourse? We have refunded them the remainder of the lease price.
Thanks for any advice
What was in the written lease agreement with regards to lameness and insurance?
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Was this insurance you had that was transferred to them when the lease started or was this insurance they took out on their own during the lease?
I too am curious what the contract says.
Yes - we had the insurance for a couple of years and it transferred to them with the start of the lease. Contract just mentions that they take over the payment of the insurance. They cancelled it without notifying us (this is also a well known trainer).
I’d think your recourse is with the insurance company. I’d think the lessee’s trainer should not have been an authorized agent to cancel your policy.
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I would definitely call your company and explain the situation.
I setup my leases so that they pay me the premium and I add them to the policy. They are responsible for all the associated bills. I also make it that the horse has to be returned in the “same, sound condition” as when it arrived. No freaking way would I refund any of the lease fee if they sent back a lame horse! In reality they should cover the cost of the rehab. That’s the risk someone takes by leasing my nice horse.
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Sorry, but as someone who has leased a number of “nice horses” I would never sign a lease contract that says that the horse has to return in the same condition as when I got it. That doesn’t mean that I’m not responsible for the lease fee or covering part of the rehab, but horses get hurt for a million different reasons. If the horse is hurt/lame due to neglect on my part, that is different.
I do think that the trainer cancelling OP’s insurance smells fishy, though. They wanted out of everything for a reason, but without more info, I can’t speculate as to why.
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Horse had a preexisting condition that we wrote into the lease - we don’t mind taking him back and refunding the remainder of the lease, we were just hoping to use the insurance (which we have had for the past 4 years) to help with the rehab. It was in our name and they took over the payments - in hindsight, we obviously should have writtten the cost of the insurance into the lease and keep the payments up ourselves. Hoping we have some recourse.
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Usually, the owner controls the insurance (and is named the payee) for this reason. You have the most to lose, so the responsibility for this bit of the deal rests with you. After all, what is actually compelling them to make sure they have paid the insurance premium?
Since you didn’t protect yourself this way, I assume you did that via a clause in your contract. If so, are the in breach of that? Can you sue for that, or threaten to and have them “make you whole?” If the insurance would have covered treatments for the lameness, then it seems to be that they would be liable for the portion of the expenses that your insurance company would have paid. If not, and you can still reinsure the horse, are you actually harmed by their cancellation of the policy? Of course that leg would be excluded now. But it would have been in the following insurance year anyway, so we are back to what it would cost for the lessee to make you whole by paying what the insurance co. would have.
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This. I continue to hold the policy for this very reason, I just require that the person leasing the horse pay the bills.
I hope you can get the insurance company to give you some relief. That sucks.
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Who is the first named insured on the policy?
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If the horse was injured while the insurance was in force, it should still cover what happened, and then returning the horse early is evidence something happened.
I would rip that trainer a new one. Who the hell cancels insurance that came with a leased horse?
Of course you can sue for damages if they canceled the only way you can afford to rehab the horse knowing it was injured.
Edited for the spelling!
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This is a bit contradictory. Did they just make the payments, or did the insurance actually “transfer” into their name and out of yours?
I have leased a pony and a horse and the insurance was included in the lease price and paid by the owner of the horse.
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Most insurers will let the parties of a lease decide which of them will carry the insurance policy. If the lessee is the first named insured, with lessor listed as loss payee, the lessee controls when the cancellation occurs. Some carriers might let the lessee transfer the policy to the lessor, but that should not be assumed. If they don’t let you transfer the policy, the carrier also doesn’t have to agree to continue insuring the now-injured horse via a new policy in the lessor’s name.
Another tip for lessors, when the lessee insures the horse: don’t be satisfied with just a copy of an insurance binder. Make sure the lessee paid for the insurance (the binder is usually an invoice) and that a policy is issued, with a copy delivered to you. .
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I would be checking with the insurance company.
Usually only the owner is entitled to cancel the insurance policy.
The policy holder controls the insurance and is the only one who can cancel a policy.
For continuity on renewal and to also allow extension beyond age 18 (where applicable and the horse qualifies) it’s always best for the owner to have control over the policy. If the policy was initiated by the lessor but transferred to the lessee making the lessee the policy holder, the lessor would have no recourse or ownership. All the lessor is at this point is merely a beneficiary.
Here’s an actual scenario:
I leased a horse. Horse owner (lessor) did not have horse insured, however, it was a requirement to have insurance for the lease. As the lessee, I purchased the policy. Horse was 17 at time of lease. For lease to be binding, lease contract was required to be on file. Lease contract was submitted for one year and to expire Dec 1 the following year when horse would have been 18.
A year went by. I attempted to purchase the horse or at least continue to lease the horse. I renewed my policy on the horse, paid upfront (but pending signed lease or sale contract). During my care, horse was found to have metabolic issues which we treated, and insurance was willing to renew the policy for him now at age 18 but excluding care related to his pre-existing conditions. Unfortunately, we could not come to agreeable terms and I did not purchase the horse nor renew him. Lease contract ended and horse was sent back Dec 1 the following year.
I forgot about having renewed the policy and in January horse tragically died in an accident that insurance would have covered. Owner had no policy on the horse, but I did. But my policy was not valid as there was no current signed lease on file. Full paid upfront cost of policy was refunded to me as I never had possession of the horse for the paid term and had no signed contract in file, and owner got nothing. Owner apparently had tried to obtain insurance, but due to horse’s age and pre-existing condition was not able to get coverage. I had been able to get coverage as it was an extension on a previously insured horse. Sad all around, especially since I tried so hard to keep this horse. It was a huge loss.
After this experience, I firmly believe that owners should always always ALWAYS be the policy holder. It not only gives you the control but also helps ensure continuity of coverage. Even if your lessee pays you upfront, they can return the horse early. Build insurance into your lease fee and keep your horse insured.
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Any recourse you would have would be in the leasing contract. Is the horse lame due to an injury or some sort of degenerative issue. One would be covered, one would not. Depending on what the medical issues are, you should be able to get horse insured and they’d probably put an exclusion on whatever medical issue the horse has. Which would happen even if the lessee’s continued the insurance. Hope horse fully recovers
