Insurance Can Breed Relief for Equestrians

Insurance is something that many horse owners need but hope they never have to use. Consider the following stories, all of which are true.

A disgruntled farmhand unlatches a paddock gate, allowing several horses to stampede out onto a busy road. They crash into a sports car, rendering the driver a quadriplegic. The horse owner’s liability insurance keeps him from financial ruin.

A spectator walks too close behind a competitor at a horse show while he is riding around the grounds. The animal kicks her, breaking her arm. The owner is held liable for her medical bills.

A man pays $50,000 for a champion horse at a breed auction. Shortly thereafter, while the horse is in a holding pen, another horse kicks him and shatters his cannon bone. The horse must be humanely destroyed, and the new owner is out $50,000 because he did not obtain immediate insurance on the horse.

“It was a lesson hard learned,” says Scott Dunn, vice president of Equine Insurance, a division of PHD Insurance, in Garden Grove.

The official broker for the California State Horsemens Assn., PHD insures many large stables in the county, as well as private horse owners.

A former American Horse Shows Assn. judge, Dunn has owned quarter horse race horses and has shown and bred Arabians. While he suggests that the amount of coverage a horse owner needs depends on “how much peace of mind you want” and your exposure to risk, he says not everyone needs equine insurance.

The following types of policies, however, fit the bill for many horse owners:

Full mortality covers the horse if it dies or must be destroyed. “If you have a large investment in the horse, you should protect it with mortality coverage,” Dunn says. “But if you own the horse outright and he’s a pleasure animal worth only a few hundred dollars, there’s little reason to insure him.”

A surgical policy is similar to a major medical policy for people. It covers surgery costs (excluding elective surgery or castration). Introduced to the market about five years ago, it has gained in popularity with horse owners who fear, for example, a $2,000 bill from a veterinary clinic for a common colic operation.

Liability coverage covers your exposure to claims for damage or injury caused by your horse. “Many people who keep a horse on their own property think they are covered by their homeowner insurance,” Dunn says. “If the horse is a hobby, you probably are covered; but if you’re in the horse business, your homeowner policy probably excludes that.”

Less common is the “loss of use” policy. An expensive form of insurance, it covers the horse’s value if it becomes unusable for a specific type of performance (such as a jumper who develops a leg condition and can be used only for flatwork). Popular three or four years ago, Dunn says loss-of-use coverage has tended to go out of vogue.

Insurance rates vary with breed, age (the premium rises considerably when the horse turns 13 years old), type of use (jumpers are prone to injury and therefore are more costly to insure than pleasure, trail or dressage horses) and where the horse is stabled.

While Dunn’s average client pays $750 per year to insure a horse valued at $15,000, his clients’ horses range from a $1,500 pleasure horse to a $1-million breeding stallion.

He advises horse owners to talk with their insurance agent every year and re-evaluate the horse’s value. If the animal is older, an insurance company may ask you to substantiate its value through recent show records or breeding results.

“All insurance is not the same,” Dunn cautions. “You should deal with an agent or broker who brings more (knowledge) to the transaction than the horse owner does.”

Darlene Sordillo, an author of two books on horse training and competition, covers equestrian events for The Times. Her column appears every Saturday. Readers may send horse-related news to her at: Orange County Life, The Times, 1375 Sunflower Ave., Costa Mesa, Calif. 92626.