Horse Insurance: What, Why, and How (Much!)

Insuring Your Equine Investment

There are many different types of insurance related to horses. You may want to consider mortality, loss of use, and/or major medical insurance. If you board your horse, your barn should have a liability policy. You can also take out a Personal Horse Owners Liability policy.

If you keep your horses at home, you should look into a Ranch Liability policy in addition to your normal homeowner’s insurance.

Insurance when it comes to horses is really a personal preference. If you choose to insure your horse, and what levels you select, will depend on how much risk you are comfortable taking on combined with your budget and financial situation.

This lesson is meant to be a guide to increase your overall awareness of insurance in the equine industry; please call your specific insurance company for details and rates.

Generally, your vehicle insurance will cover whatever you are towing behind it, but you may need a separate insurance policy for your trailer when it is not moving—and for its contents.

If you invest in high-value tack or equipment for your horse, you may want to insure that as well.

While your homeowner’s or renter’s insurance policies may cover some tack items, there are generally dollar limits to be aware of.

Learn more about equine insurance in our beginner’s guide blog post.

Insurance Company Ratings

When evaluating insurance companies, you should consider the insurance company’s rating and if the insurance company is admitted in your state.

When we say “rating,” we don’t mean the number of stars on their Google reviews.

A company called A.M. Best provides a grade to individual insurance companies, ranging from A++, down. This rating is based on the company’s financial strength and solidity. Some ratings will be followed by a number, which indicates the financial size of the company.

These ratings are available on ambest.com. Ideally, you would want to select a company with an A- rating or better. A- correlates with “Superior.”

To be admitted in a particular state, the State Department of Insurance must review the insurance company’s books and file its rates. This provides customers an option for recourse if you have an issue with the insurance company.

Go to your state’s Department of Insurance website to look up whether a company is admitted or not. If you are looking for very specific insurance coverage, you may not be able to find an admitted company—in this case, the company’s rating will be your best indicator.

Types of Equine Insurance

Mortality

Equine mortality insurance is designed to pay you either the actual value or agreed value (determined when you sign up for your policy) of your horse in the event it dies from an accident, disease, illness, or injury. Some policies also cover theft.

Policies can vary dramatically between companies, so get several quotes and read the fine print. That said, if you want to calculate a rough approximation of what mortality insurance might cost you, 2-3% of the insured value per year is a reasonable starting point.

Loss of Use

This type of policy is designed to reimburse you for the value of your horse if they become permanently unsound for a specific performance use.

Some insurance companies will insure for full loss of use, which could result from an injury or disease. Others may only offer loss of use for an “external traumatic accidental injury” such as a trailering accident.

You will need to document the horse’s level and use in their particular discipline.

Full loss of use will require a veterinary exam and may pay out 50-100% of the insured value of the horse.

It is important to note that after payment, the horse will become the property of the insurance company, which will likely try to rehab the horse to find some other use, allowing them to minimize their losses. This could be upsetting, as many people view their horses as pets—not property.

Other policies allow you to accept less money and keep the horse.

Again, read the fine print!

Major Medical

In some cases, you must have mortality insurance and a certain valuation in order to be eligible for major medical insurance policies.

Major Medical generally covers “reasonable and customary veterinary expenses” in the instance of an accident, injury, or illness.

Each insurance company can have their own list of exclusions, so you do need to read each policy carefully to fully understand the fine print. For example, insurance may not cover transportation to a veterinary hospital.

Preventative, pre-existing conditions or elective procedures are generally not covered.

For example, if your horse develops bladder stones and needs surgery to remove them, this condition may be covered the first time but excluded on a renewed policy.

Most major medical policies will have coverage limits. They can also have deductibles and copays. You will pay vet bills out of pocket and then be reimbursed by the insurance company.

In both mortality and loss of use insurance, you will need to set the valuation of your horse. This is generally set using the horse’s purchase price, as it is a somewhat less subjective point of reference.

Once valuation is set, it can be difficult to change.

Two possible ways to increase your horse’s value are with documented training and showing.

For example, at Quarter Horse shows, you can earn points in a particular event. If you add 50 points in an event during the course of a year or add an achievement such as a Register of Merit in a new event, you can submit this documentation to the insurance company to support an increase in your horse’s valuation.

Liability

Liability insurance offers the owner protection if your horse injures someone else or damages another person’s property. This is a good option if you own a horse, but board them on someone else’s property.

This option is generally inexpensive; for example, Markel Insurance offered Personal Horse Liability insurance up to $300,000 for $58/year per horse (in 2021).

Tack and Equipment

Tack and equipment could be covered under your existing homeowners or renter’s insurance policies, but some items may exceed existing limits. Call your insurance company to check.

You can purchase separate coverage to protect specific, high-value items, referred to as “scheduled personal property.”

Trailer

Your towing vehicle insurance extends to your trailer, but it isn’t comprehensive.

Towing vehicle coverage means the insurance company will cover the cost of damage by your trailer to someone else’s property or injuries caused by the trailer. It does not cover damage to the trailer, or trailer contents, in the event of an accident or trailer theft.

You will want to contact your insurance company to add an endorsement to your existing policy for comprehensive and collision coverage on your trailer.

Trailer contents may be insured under your homeowner’s policy. Your horse will NOT be covered under a trailer policy, which is where equine insurance would be helpful.

Risk vs. Reward

Equine insurance can provide valuable coverage to help you cover unexpected bills from accidents, injuries, illness, or theft. Be sure to read the details of your policy carefully and ensure you understand and communicate it to those who need to know.

For example, some equine insurance policies will become void if anyone other than a licensed vet touches your horse with a needle.

If your horse is showing signs of colic and your trainer gives them a shot of Banamine, you may have just voided your insurance policy.

If you have loss-of-use coverage and your horse can no longer perform their insured job, you can get a payout, but the insurance company may now own your horse.

Parting Thought

Insurance can be complicated, but it is worth learning about to better understand the different options and determine what may work for you.

P.S. Enjoy this article? Trot on over to: 

• Beginner’s Guide to Equine Insurance (And Peace of Mind)
• How Much Horses Cost & How You Can Actually Afford One
• Horse Rookie’s Monthly Expense Reports
• 60 Questions to Ask When Buying the Horse of Your Dreams
• How to Ride a Horse for Beginners (Basics, Safety, Mistakes)

Sources:

Understanding Equine Insurance Policies

Horse Mortality Insurance by Markel

A Practical Guide to Equine Insurance

How to Inventory and Insure your Horse Tack

Personal Property Coverage

Horse Trailer Insurance Questions