Insuring the first horse

[541hunter]

Happy holidays COTH! After a very Merry Christmas indeed, I am just finishing up the purchasing process of my very first horse ever! I’d like to get insurance on him, but I’m having some trouble figuring out the process. I called Markel but the underwriter was not super helpful, so I thought I’d ask for your opinions.

The horse was advertised as 15 coming 16, which is what his USEF record says. However, after some digging I found his FEI record under a different spelling of his name, which states he’s a '99 model. No problem, a year one way or another with a near-perfect PPE and a mile-long show record doesn’t bother me, and I know how easy it is for age to get mixed up. But 16 is a little more expensive to insure. I’m somewhat tempted to just give the insurance company his USEF number, not the FEI, but I guess that’s fraud, isn’t it? :lol:

Anyway, value is under $20k. At his age, would you insure for that full amount? The rates Markel gave me were 6% for a 16 year old and 7% for a 17 year old. If I buy before the end of the year, I get the 6% rate, plus $255 for $10,000 in surgery/major medical and $2500 free colic surgery on top of that. That means an annual premium of $1550. Is that about what I should expect from every company? Would you go for all that coverage?

[BITSA]

541: feel free to email if you want. Lola is insured through http://www.rideemo.com/ (Greta is not insured). Now, she’s only 6 so the rates I am sure are different; Pony’s mortality is 3.6%, I’d have to look at what the major medical is.

I’d also be very candid with the insurance company about the discrepancy in birthdate–that can be a reason to drop you after the fact. :eek:

[IPEsq]

I would insure for his full purchase price, which you can evidence with your bill of sale. Call around, but that sounds pretty reasonable. I find the greatest variances to be in the MM coverage fine print.

[541hunter]

[QUOTE=BITSA;8458836]
I’d also be very candid with the insurance company about the discrepancy in birthdate–that can be a reason to drop you after the fact. :eek:[/QUOTE]

Probably good advice haha. I’ve been putting his FEI birth date down – I’ll have to fix the USEF record myself once the bill of sale comes through.

[BITSA]

[QUOTE=541hunter;8458863]
Probably good advice haha. I’ve been putting his FEI birth date down – I’ll have to fix the USEF record myself once the bill of sale comes through.[/QUOTE]

oh, and CONGRATULATIONS!!!

[gottagrey]

At 16 you might want to discuss getting mortality and adding a surgical policy, no major medical. Surgical only would help in case of a serious injury or colic.

[Daventry]

You are definitely going to pay a higher premium with horses 16 years of age and up. Like everyone else has already said, you need to be honest with the insurance company about his age. It is insurance fraud if you don’t disclose it.

Regardless of who you go with, make sure you know your policy inside and out! Will your horse be insured for “agreed value” or “actual cash value” (fair market value)? With agreed value, if your horse is insured for $10,000 and the horse dies, the insurance will pay out $10,000 as long as there is proof of value. With actual cash value, you may be paying premiums on $10,000 for 3 years, but if your horse dies, the insurance company will only pay out what your horse is worth at the time of death (fair market value). If the economy tanks, etc., and the fair market value is only $4,000, that is unfortunately all you will get.

Most horse owners are under the impression that if they insured their horse for $20,000 and they’ve paid their premiums every year that they will get $20,000 if they die. Unfortunately, no always true! Unfortunately, I find some insurance brokers don’t always explain the type of policy you are purchasing.

There honestly is nothing wrong with purchasing an actual cash value insurance policy. That’s what I have in place for two of my horses. That being said, I’ve been very careful to only insure them for what they are worth (haven’t inflated the value) and I have kept excellent records for each horse, including current videos, photos, show results, etc.

Regardless of the insurance company you choose, please, please, please make sure to keep good records on your insured horses - including pictures, video and show records…and remember to continue to update them! I’ve done several very tough equine appraisal cases in which the owner didn’t have a single photo or video of their insured horses that passed away, no show record, nothing…which makes it extremely tough to prove their value! And, if you feel like the insurance company is giving you the run around, and you truly believe your horse is worth more, get your own independent equine appraisal done and present it to the insurance company. I do a lot of these…and it does work!

I’ve written an article in regards to the ins and outs of equine insurance and explains things like Major Medical and “Loss of Use”: www.equineappraisers.com/howwelldoyouknowyourpolicy.html

[mvp]

[QUOTE=gottagrey;8458932]
At 16 you might want to discuss getting mortality and adding a surgical policy, no major medical. Surgical only would help in case of a serious injury or colic.[/QUOTE]

Hmm. I’d do it the other way:

Insure the horse for an agreed value amount. Make it lower than his purchase price so as to save on your premium. Or perhaps for the first year, I’d insure for full value but drop down later. I was taught to think of the payout on a mortality policy as not related to the horse’s value so much as it would be related to what I’d spend on the next one. I tend to buy cheap and green, so that works for me.

I would get major medical coverage. That’s because this is usually the best coverage you can buy. After all, a soft tissue injury costs as much to diagnose and treat in a cheap horse as an expensive horse. And because it’s not life-threatening but expensive in terms of time off and/or a career ender, you’ll be tempted to keep spending to try and fix it. Let your insurance company pay for that.

I would (and do) care more about the quality of the major medical coverage policy than I do a colic surgery policy. I haven’t been in this spot (Thank God), but I would find it easier to choose to euthanize a horse colicking and a candidate for surgery (plus the bills, plus the rehab, plus might not be able to return to previous levels of work), than to choose to bail on that soft-tissue case mentioned above.

Congrats on your new horse! So sorry insurance is so expensive for the teenage horse! But it sounds like your horse is a pretty sound one. He carries his own insurance in his head and his body.

[Anne]

I 100% agree with mvp. I use insurance for the major medical, and have never insured for mortality at true market value.

[MorganJumper848]

I would not recommend Markel for Major Medical. I had many issues with them actually paying me for services that my horse was supposed to be insured for. Also, I do not have my horse insured for his actual value because I don’t think it is worth it in the end. I also know enough people that had their horse insured for the actual value and the owner wanted the horse put down due to a traumatic injury and the insurance company wouldn’t pay the mortality because they didn’t do everything possible to keep the horse alive. So, there is always the possibility that you may not get the mortality payment.

[541hunter]

Thank you all for the advice! I promise I was kidding about lying about his age – my (lawyer) dad suggested it and then wondered aloud if the USEF would authorize an ‘A’ show in a federal prison. :lol:

I sent out a bunch of requests for quotes last night and got a great response from a local insurance salesman – he only does ag-related stuff and he worked really hard (past business hours!) getting me a bunch of options. I’ve landed on a great policy with XL Specialty Insurance – if I get it done before the first of the year, I’m paying 4.9% of insured value plus $450 for $10k of major medical/surgery coverage, and an extra $5k for colic surgery free with my mortality coverage. So $1356 annual premium for $15k medical coverage and $18.5k mortality vs. $1550 with Markel and $1746 with the Hallmark company. And yes, it’s an agreed value policy – I made sure to check after reading all your responses!

In case any of you are in Oregon looking for insurance, West Coast Equine Insurance Services and Rich Maggard are fantastic! Very helpful and super-fast responses.

[MorganJumper848]

Great news! I will be shopping for a new insurance company in the spring!

[JLC]

[QUOTE=541hunter;8459641]
Thank you all for the advice! I promise I was kidding about lying about his age – my (lawyer) dad suggested it and then wondered aloud if the USEF would authorize an ‘A’ show in a federal prison. :lol:

I sent out a bunch of requests for quotes last night and got a great response from a local insurance salesman – he only does ag-related stuff and he worked really hard (past business hours!) getting me a bunch of options. I’ve landed on a great policy with XL Specialty Insurance – if I get it done before the first of the year, I’m paying 4.9% of insured value plus $450 for $10k of major medical/surgery coverage, and an extra $5k for colic surgery free with my mortality coverage. So $1356 annual premium for $15k medical coverage and $18.5k mortality vs. $1550 with Markel and $1746 with the Hallmark company. And yes, it’s an agreed value policy – I made sure to check after reading all your responses!

In case any of you are in Oregon looking for insurance, West Coast Equine Insurance Services and Rich Maggard are fantastic! Very helpful and super-fast responses.[/QUOTE]

I love XL specialty insurance. I had such an amazing experience with them with my horses soft tissue injury.