Source: Text by Mati Jarve
As the new year gets under way, many people are enjoying the benefits of equine ownership, some perhaps for the first time. Unfortunately, though, more than a few horse owners neglect one very important aspect of horse ownership: insurance. I have written about equine insurance before, but the beginning of the year is a great time to post an “insurance refresher,” reminding all horse owners that it should be considered a necessity, not an option.
A horse is a big investment, and it makes complete sense to protect that investment. Still, if you’ve done any research on equine insurance, the sheer number and types of policies available can seem overwhelming. Basically, though, to have at least the minimum protection, you should consider the three goals of equine insurance: protect your horse, protect yourself, and protect your activities.
Protect your horse
Whatever the initial purchase price, the cost of keeping and caring for your horse makes it a substantial investment overall. If something should happen to your horse, you will want to be in a position to recoup some of that investment. There are policies of insurance available that protect against injury, illness and death of your horse. These types of insurance are commonly called Mortality, Major Medical, and Loss of Use. Mortality insurance will reimburse you in the event your horse dies.
Typically, these policies will cover the loss regardless of whether the cause of death is natural (i.e. colic), due to injury, or caused by a catastrophic event (i.e. fires or floods). However, many of these policies will hold exclusions for death caused intentionally, and some may exclude death resulting from the negligence of the owner.
The cost of Mortality insurance depends upon the several factors, including the age of the horse, intended use, genetics, breed, training, and so forth. Cost also depends upon the amount of coverage you choose, which can be 100 percent or less of the horse’s value. As you might imagine, horses’ values vary widely, depending not only on the purchase price but also the amount of training, competition records, breeding records, etc. Therefore, the cost of Mortality insurance will vary, depending upon your particular circumstances.
Major medical, as the name suggests, is like health insurance for your horse. Generally, such policies cover extraordinary medical expenses, such as diagnostics, surgery, medicine needed to treat certain conditions, postoperative care and palliative care. These policies usually don’t cover routine care or elective procedures. They often have restrictions and exclusions for pre-existing conditions, and can vary widely in the scope of coverage. The cost will depend on the same factors as for Mortality insurance, and can increase or decrease depending on your choice of coverage (i.e. a policy covering surgery only will cost less than a policy covering medication and diagnostics).
Loss of Use policies are less common and a bit more complicated because of the particularity of the terms. Generally, they are purchased in circumstances where a horse is bred and/or purchased for a particular use (racing, jumping, and so on). The use covered needs to be stated with specificity, and coverage is typically narrow in scope. Unless stated with clarity, it can be difficult to prove that a horse is not fit for a particular use (i.e. the general use of “trail rides” can be very broadly interpreted whereas “professional pole bending” is much more specific).
Most people reading this likely have health insurance of some kind. It is important to check with your health insurance provider to make sure that they will cover injury resulting from equestrian activities. While more the exception than the rule, there have been instances when coverage has been denied to individuals injured during high-risk equine activities. There are specific policies available that cover high-risk sports activities.
In addition, everyone who rides a horse, either recreationally or competitively, should consider disability insurance. Although we don’t like to think about it, no matter what our experience level, there is always the risk of debilitating injury from riding a horse. Every individual should have coverage in the event they are disabled for any period of time due to equine activities.
Protect your activities
Many people make the mistake of believing that their state’s equine liability laws will protect them against all mishaps occurring during equine related activities. This is not entirely true, and I refer you to my most recent article (published a few months ago) giving an overview of the scope and application of equine liability statutes.
The fact is, equine liability laws do not equate to zero liability or complete immunity. They do not prevent horse owners from being sued. Liability insurance is still highly recommended. Thus, for equine professionals running a horse-related business, commercial liability insurance or equine professional liability insurance should be purchased (depending upon the type of equine operation).
For the non-professional, liability insurance is still an important investment. Many make the mistake of believing that their homeowner’s insurance will cover any injury or damage caused by their horse. Unfortunately, this is often not the case. Too many people don’t realize this until they are sued and their homeowners’ insurance refuses to enter a defense, quoting an exclusion for livestock (which horses, by law, are considered), or other such reason. Further, suppose your horse gets loose and runs into traffic, causing a serious accident? You are responsible for the resulting damage and injuries, and unless you have liability insurance coverage, you could find yourself in a difficult legal mess. The cost of liability insurance is generally well worth the peace of mind for any horse owner.
There are many insurance companies out there selling the types of insurance mentioned, some of which are reputable, some of which are not. To find the right insurance company, don’t just rely on online ads or web searches. Instead, talk to others who have purchased insurance or ask around at equine events. When purchasing a policy of insurance, make sure know exactly what is covered, and ask questions like:
- What are the annual premiums?
- What exclusions apply?
- What is the deductible on claims?
- Are there any limits on the number of claims?
- What is the claims process and how long does it generally take?
- What effect will a claim have on the annual premium?
- Does the policy have an auto renewal option?
- Who is the policy’s underwriter?
Finally, always check with the Better Business Bureau before signing with any company to see whether there are any red flags of which you should be aware.
Whether you own a horse for fun, profit, competition, or all three, it is both a financial and emotional investment that deserves protection.
Mati Jarve is the managing partner of the Marlton, New Jersey law firm of Jarve Kaplan Granato, LLC. He is certified by the New Jersey Supreme Court as a Civil Trial Attorney and theNational Board of Trial Attorneys as a Trial Advocate. Licensed in New Jersey, Pennsylvania and Arizona, he maintains a national practice in civil litigation, including equine related issues. This article is for informational purposes only and is not intended to be legal advice. If you have a specific legal question or problem you should consult with an experienced and knowledgeable equine law attorney. Questions, comments or suggestions can be e-mailed to firstname.lastname@example.org, by visiting www.nj-triallawyers.com.