Equine Health Insurance

"Major medical" sounds similar to human health insurance, but it's far more limited.
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"Major medical" sounds similar to human health insurance, but it's far more limited.

The debate over the rising cost of health care, health insurance, deductibles, co-pays and pre-existing conditions doesn't just confront everyday Americans. These issues are alive and kicking in the equine world as well.

Love aside, is it worth risking all the time and money you put into training over a small annual premium?

Love aside, is it worth risking all the time and money you put into training over a small annual premium?

The good news is that as equine veterinary technologies continue to improve, horses benefit from quicker and more accurate diagnoses and better, more effective treatment choices. And, increasingly, horse owners want state-of-the-art veterinary care.

The bad news is that as equine veterinary care becomes more sophisticated - with its increasing specialization and advanced, expensive technologies - the cost increases, too.

Just as there are companies that sell health insurance to people, there are companies that offer major medical and surgical insurance policies for your horse. These policies are only offered as endorsements to purchased full mortality policies, meaning that they are insurance plans not available as stand-alone policies. They're sold as an addition to a mortality policy for an extra premium.

Don't get discouraged, though. If you already have a mortality insurance policy, the major medical/surgical coverage costs about as much as one horse show. Our chart indicates that the added cost ranges from $150 to $675 a year, which is $12.50 to $56.25 per month. So, if you're interested in avoiding a heart-wrenching decision solely because you lack the money to pay for treatment, read on.

COVERAGES. Major medical/surgical policies pay for the reasonable and customary charges provided to your horse by a licensed veterinarian for an accident, illness, disease or injury. These insurance plans also pay for most diagnostic tests such as x-rays, ultrasounds and the increasing more utilized and costly MRIs and nuclear scans. They do not cover routine preventative care such as immunizations and dental care, nor do these policies cover corrective shoeing or alternative therapies such as chiropractic, massage or acupuncture.See our chart on Insurance Jargon and Types of Policies

Surgical policies cover the reasonable and customary charges from a licensed veterinarian for surgical services only. Surgery is defined as procedures requiring general (not local) anesthesia that must be performed at an equine veterinary clinic (read: not your barn).

Surgical insurance policies don't cover any elective surgery, such as castration or neurectomy. Though dental care is usually excluded from coverage, surgical policies may cover dental procedures when this surgery is required as a result of an accident. Most surgical policies will provide coverage for post-op hospitalization veterinary care.

Some horse owners choose to forego a major medical/surgical policy and buy a less costly surgical policy only. it's important to understand that if you make that choice, the policy covers surgical procedures and post-op care only. It will not cover any treatments or often costly diagnostic procedures done prior to a surgery. See our chart of Costs, Coverages and Limits.

TRICKS OR TREATS. You have to do your homework before purchasing a policy, so watch for exclusions and limits. In addition, learn all you can about the insurance policy, the underwriting company and the agent with whom you are dealing. See "Equine Insurance: It's All About Protection."

Surgical costs include paying the veterinary clinic workers for post-op care.

Surgical costs include paying the veterinary clinic workers for post-op care.

Be aware that major medical/surgical insurance isn't highly profitable for insurance companies. They offer these policies largely as an inducement to horse owners to purchase their more-profitable mortality insurance policies.

Barbara Kirby of Markel said to look into the reputation and stability of the company. "We've seen companies get into and out of the business quickly," she said. Kirby also advised that you get the appropriate amount of coverage for your horse and be sure to ask about specific limits and exclusions in your policy.

Major medical/surgical policies do not come in "one-size fits all" contracts. Insurers offer a variety of coverage limits from which to choose (usually from $5,000 up to $15,000). They may allow for "stacking," an insurance term meaning that a policy holder can buy more than one policy and add the coverage together to provide a greater amount of insurance coverage.

Some companies will provide medical/surgical coverage only up to the claimed value of the horse. Others may offer medical/surgical coverage that provides coverage for the amount of the policy, even if it exceeds the value of the horse.

Insurance carriers won't usually drop a policy holder for filing a claim. Instead, the policy holder will likely be subjected to an "exclusion" for future coverage for that particular health problem. Depending on the veterinary problem, such an exclusion may be permanent or may be in effect for a set period of time and erased if the problem does not recur.

UNDERWRITER RULES. The major players in the equine major medical/surgical insurance business are Chartis, Great American, The Hartford, Markel and the American Equine Insurance Group. Annual aggregate coverage limits for these companies range from $2,500 to $15,000 with annual premiums ranging in price from $160 to $450.

All five companies require deductible payments (the amount you must pay before the insurance kicks in) to be made by the insured before their policies will pay a claim. Deductibles aren't cumulative, the way they are in human health insurance. You will be required to meet your deductible for each separate claim you make. Deductibles per claim vary among the four underwriting insurers but range from $250 per claim (Great American) to $1,500 per claim (The Hartford).

Along with deductibles, your insurer may require that you pay part of the cost (co-pay) for various types of care. For example, Great American requires a 30% co-payment from its insured for diagnostic imaging and surgical procedures.

Additionally, some insurers may cap the amount of reimbursement you will receive for certain services. Chartis, Great American and Markel all have caps on the amount they will pay for shock wave therapy (while The Hartford imposes a 50% co-pay). Others will merely provide coverage for such treatments up to the coverage limit of the policy.

THE DREADED "EXCLUSIONS."

 An often-heard complaint about these policies is the many "exclusions," or situations, conditions or services for which the insurance company won?t provide coverage. In applying for major medical/surgical insurance you will be asked numerous questions about your horse's use and veterinary history.

It's imperative that you answer the questions on the insurance application carefully and honestly. Obviously, insurers won?t cover a pre-existing condition nor will they cover a veterinary problem that you failed to disclose to them.

Some exclusions are clear, unequivocal and universal in the equine insurance business. A horse used for racing is one such example. However, other exclusions may fall into gray areas.? Generally, "navicular disease/syndrome" is excluded from coverage. Some in the veterinary community maintain that there is no actual definition of these terms and that with improved diagnostic imaging, these labels are outdated and incorrect.

That said, a statement made in a veterinary report or on an application for major medical/surgical insurance that your horse has had some type of navicular problem may trigger exclusionary language being written into your policy or may result in the denial of a claim. Be honest, but careful.

If your insurer does include an exclusion in your policy contract, make sure that it is specific as to the exact veterinary problem and reasonable in terms of length of time the exclusion will be in effect. In some cases, you can challenge the insurance company's exclusion with the help of your veterinarian and perhaps get the exclusion removed.

See our chart of Major Medical Terms and Exclusions

WHAT YOU SHOULD DO. Given the various coverage limits, premiums, deductibles, co-pays and exclusions, it's clear that carefully reading and thoroughly understanding all the ins-and-outs of your policy is imperative. If you don't understand a term or condition, or if wording in your policy is unclear, ask your agent for clarification until you do.

Notifying your insurance agent at the first signs of a medical/surgical problem is essential. In cases where your horse has become sick or injured after hours, call the after-hours number for your insurance company or underwriter, which they should provide to you with your policy. Failure to make timely notification may result in your claim later being denied.

Though reading an insurance contract and understanding the requirements can be a wonderful cure for insomnia, it's best done before your horse is in a crisis. If you board your horse, make sure your barn manager has your insurance information and the 24-hr. number to call if your horse becomes ill or injured when you are not available.

BOTTOM LINE. When you consider the often exorbitant expense of non-routine veterinary care, major medical/surgical insurance is worth the relatively small investment when you already carry mortality coverage.

It's critical that you understand your policy before you purchase it. Establish good communication with your agent and promptly notify the insurer when your horse is showing signs of illness or injury. Document your expenses with receipts and file claims promptly. When you have a horse in your life, this small fee can mean one less thing to keep you awake at night.

Article by Contributing Writer Susan Quinn, Esq.