What type of equine insurance should you buy?
Whether you own an elite show mount or a trail horse, equines are a valuable part of our lives. Accordingly, many horse owners probably consider their horse priceless. It may be worth a look at purchasing equine insurance to cover your horse’s value.
Purchasing equine insurance requires an honest assessment of your horse’s value and your budget. Additionally, are you buying equine insurance for peace of mind? Or are you price shopping equine insurance looking for the best price?
Undeniably, there is a wide range of insurance companies. Each has its own policies and procedures. As a horse owner, it is important that you’re familiar with the types of equine insurance policies. Additionally, take the time to understand what you are buying.
An equine insurance agent with strong customer service skills makes the process easier. Otherwise, navigating legalese written by the insurance company may leave you feeling confused and uneasy. It’s important you have a clear understanding of your obligations as a customer. That information may become crucial during a claim.
Agreed Value vs. Actual Cash Value
As a result, when considering purchasing equine mortality insurance you may come across different terms related to your horse’s value. These include “agreed value” and “actual cash value” (fair market value).
An agreed value option means that if your horse is insured for $10,000 and it dies, the insurance company will pay out $10,000. That is because you provided the insurance company your horse’s proof of value when you purchased the policy, which is standard. Proof of value can vary from show results, a bill of sale, or simply filling out a Justification of Value form for the insurance company along with your equine mortality application.
In contrast, with actual cash value, you may be paying premiums on a $10,000 valuation for five years, but if the horse dies, the insurance company pays the horse’s fair market value or what the horse was worth when it died. If your horse dies while laid up with an injury, for example, the fair market value of $6,000 determines what the equine insurance company will pay on the claim. Many horse owners think if they insure their horse for $10,000, then pay their premiums yearly, that they will get $10,000 if their horse dies. That is not always the case.
It is important to understand the type of policy you are purchasing, along with the horse’s value on the policy yearly, to ensure the horse’s market value is correct.
Tracy Dopko provides valuable services to the equine industry as a Certified Senior Equine Appraiser, Equine Expert Witness, and as a licensed Private Investigator. She travels across the United States and Canada yearly conducting equine appraisals. Similarly, Tracy appraises top equines including jumpers and dressage horses in Europe. In 2018, she celebrated her 20th year in the business with 4,000+ hours of equine appraisals.