You've decided to purchase mortality insurance for your horse-life insurance, essentially, so you'll be able to continue your involvement in the sport even if the unthinkable happens and your horse has to be put down. Now you just need to heave a sigh of relief and pay the premiums, right?
Well, close. In order to avoid any nasty surprises in the event you submit a claim, you also need to make sure you track the changing value of your horse, understand your policy, and communicate with your insurance company. None of these is difficult or time-consuming, but they can make the difference between an easy and a frustrating experience at a time when the last thing you need is headaches and hassles.
How much is your horse worth? Before you jot down a number, think for a minute. One of the most important steps you can take to make your insurance experience run smoothly is to "insure to value," says Joe Carr, Vice President of Ag Business at American Bankers Insurance Company. He recommends starting with the purchase price and add on value only if you're able to substantiate it. "Insurance is not an instrument to make money," Carr says, but a safeguard to put you back where you were before the loss of your horse. Good insurance companies will work with you to come up with a realistic figure, if necessary, but ultimately the legwork is up to you.
"Horse owners need to keep in touch with what the market is," says John Hart, president of the American Equine Insurance Group. Reassess your horse's market value every time you renew the policy. Talk to a trainer, look around at local shows, keep an eye on advertisements, or hire an equine appraiser certified by the American Society of Equine Appraisers.
Mortality insurance is easy to buy these days. Some companies require a documented valuation before the policy is written, and require further documentation if you seek to increase the amount for which your horse is insured. If you then have to file a claim, the value is already established.
But other companies are more likely to do the stringent valuation check at claim time. While most underwriting companies will ask detailed information on your horse and seek justification for the amount you're insuring for-you may not have to produce a bill of sale or other hard evidence at application time. "We generally take the customer's word [at the time of application]," says Barbara Kirby, vice president of Agri-Risk Services, Inc.
But come claim-filing time, you'll need to produce some evidence that your horse is worth what you thought. Because no matter what the premium you've been paying, the insurance company will pay the horse's actual value. For example, trouble might arise if you buy a horse for $15,000 and feel so sure it's going to become a national champion in your sport within the year that you insure it for $100,000. If the horse needs to be put down before it has begun to prove itself you're probably only going to receive the $15,000 worth you can prove-even though you've been paying premiums for $100,000.
Most insurance companies recommend you keep records as you go along, to save yourself hassle in the long run. A bill of sale, cancelled check, or other proof of purchase price serve as evidence. You should also keep track of training expenses, show ring performance, breeding performance, or any other proof of your horse's increase in value. Then adjust your policy amount up or down each year as necessary, to reflect your horse's current value.
As is the case so often in life, communication is key to establishing the best possible relationship with your insurance company. "People think they're penalized because they're being honest, but they're not," says Kirby of Agri-Risk Services. For example, you might consider not informing the agent of your horse's colic three years ago, fearing the company might not sell you the policy or might include an exclusion that wouldn't cover your horse for a colic-related death. But reputable insurance companies try very hard to work with their customers who are forthcoming and honest. If you're upfront about your horse's health history, the company can take extenuating circumstances into account-your horse colicked when you moved from Maryland to California, no big surprise-and not worry about exclusions. "The company tries to be as understanding as possible," says Kirby. If the company finds out later that you've held back relevant information, however, you may be looking at an exclusion regardless, or you may find you've nullified your policy.
One standard provision in virtually all mortality policies is immediate notification of any health issues. Your insurance company will provide you with a toll-free number where you can reach someone 24 hours a day. If your horse faces an emergency, you should call the number as soon as possible. "Tend to the animal's best interests," says Andy Beauchamp, vice president of Equine Insurance Specialists. "But contact your insurance company immediately." The adjustor you speak with can help you evaluate options and make decisions in view of your situation and your insurance coverage. If your horse faces a less dire situation, you can call during business hours-but companies generally stress that when in doubt, call. "Common sense prevails," says Carr of American Bankers. "We don't need to know about a scrape in the pasture. If the horse founders, we do want to know." With medical claims, this is self-evident, but even with mortality or loss-of-use claims, prompt notification is important.
UNDERSTAND YOUR POLICY
Again, this concept is self-evident, but it bears repeating. Read your policy. Ask your broker any questions if something isn't clear. Understand what's covered and under what circumstances, and what isn't. Make note of any actions required on your part. Will delayed notification of an illness or injury nullify your policy? You need to know before an emergency strikes, and before you seek to file a claim.
In general, getting the most out of your insurance boils down to the basics. Insure with a reputable company recommended by someone you know. Evaluate your horse's value as stringently as you can, and don't hold back information. "Fill out applications correctly the first time," recommends American Bankers' Carr. And know your policy. "As long as individuals follow the terms of the contract-and these are very open-they shouldn't have problems," says Beauchamp of Equine Insurance Specialists. Agri-Risk Services' Kirby emphasizes this as well: "[Horse owners] need to follow the terms of the policy."
As simple as that.
- Laurel Berger O'Connor