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Equine Insurance |
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Understanding Risk Management:
Horse-Cents, LLC is not a licensed insurance agency or broker. The opinions offered herein are based on consultations with insurance industry experts and should be confirmed with your own insurance agent(s).
The Purpose:
I assume that all of us are familiar with the basic concept of buying insurance... auto, homeowner's, life, health, etc. All insurance policies work on a similar concept; a large group of people pay into a financial "pool", and in the event of a "covered loss", the pool pays out to the policy holder compensating for the loss.
Some forms of insurance are mandatory by law (e.g., automotive liability), others are prerequisites for important life activities (e.g., homeowner's insurance is required to get a house mortgage), and some are virtually required in today's society (e.g., health insurance). An additional class of insurance could be thought of as "supplemental", providing additional or "nice to have" protection for such things as extended warranties on appliances, automobiles, etc.
Risk Management:
The decision whether to buy non-mandatory insurance, and how much to buy, should be the result of a risk analysis study. What do you have to lose, and what will it cost you to protect your assets?
For example, it would be unwise to pay $100 a year for an insurance policy (extended warranty) on a 10-year old 19" color TV set... it could be replaced with a new, better model for less than 2 years premium. However, paying $10 per year to buy insurance for a $5,000 big-screen entertainment system might be worthwhile. It all comes down to risk versus cost.
When considering a TV set, the risk is easy to quantify... the cost to replace it. However, when considering more complex issues, the risk goes up substantially. For example, we carry liability insurance on our cars to protect us from claims pressed by injured parties. It provides a level of financial protection for our personal assets if we are held liable (at fault) for injury or property damage to others.
Most experts agree that the greater your personal assets, the more insurance you need to protect yourself. Unfortunately, in today's society, the entity (person, family, business, etc.) seen as having "deep pockets" is often the target of excessive and sometimes exaggerated damage claims. Regardless of your "family fortune", it seems that society is in a "sue first - ask questions later" frame of mind.
Trailering Risks:
There are at least three risks that you should be aware of when owning a horse trailer:
- Risks to the trailer itself (e.g., theft, fire, collision, etc.)
- Risks to persons and/or property created by the horses under your Care, Custody, or Control
- Risks to the horses being transported (e.g., injury or death caused by an accident)
The Trailer:
The first item, risks to the physical trailer, are limited to the replacement cost of the trailer. For a $10~$25,000 trailer, this can be a substantial risk. If you feel that you cannot easily afford to replace the trailer in the event of a total loss, you should consider getting insurance coverage on it... much the same as on your automobile. The types of coverage that cover loss to your own trailer are called Collision and Comprehensive.
 | Collision coverage is for losses resulting from a collision (moving accident) that is your fault. |
| Comprehensive coverage protects you from non-collision losses such as theft, fire, vandalism, etc. |
Protection:
Many companies that underwrite regular automobile insurance will also cover your horse trailer for an additional premium; however the trailer must be added to your policy. Just like with auto insurance, there are options for levels of protection, deductibles, etc.
Injury or Damage Caused by a Horse:
Anyone that owns, or spends time around, horses should know that they are large, strong, and potentially dangerous animals. A panicked horse can do more damage in 60 seconds than most people realize, both to itself and anything around it.
Unfortunately, loading and unloading horses from trailers are opportunities for trouble. That is one of the many reasons why EquiSpirit trailers are the best... every effort has been taken to insure that our trailers are the safest and most stress-free available. Horses are less likely to panic with an EquiSpirit because we remove as many of the "panic button pushers" as possible.
However, accidents can and do still happen. A horse can rear and pull away from its handler and run off. If you are lucky, it won't hurt itself, anything, or anyone. However, in a parking lot full of trucks, horse trailers and cars, it could easily kick out some windows, dent a few fenders, break a couple mirrors, etc. It is also likely that a person or two could get injured. You can (and most likely will) be held liable for all the damages done by the horse (even if it is not yours but was in your Care, Custody, or Control)... and it could get expensive.
In a worse situation, the horse could bolt into traffic causing an accident. Many of us have seen the devastating effects of an automobile accident with a deer. While the deer is nearly always killed, many of the cars are severely damaged or totaled, and many people are injured and/or killed each year as a result. Now consider that most deer weigh one-tenth that of a horse. A collision between a horse and an automobile full of passengers is a terrible thing; sure to cause a lot of physical and emotional injury. In a case like this, you can be held liable for all the physical injuries, as well as the intangible damages such as lost wages, emotional stress, loss of companionship, loss of use, etc. Lawsuits could drain you of most of your savings and personal assets.
Many primary insurance policies (personal auto, homeowners, and/or umbrella) will not offer any liability coverage for the actions of a horse or involvement in equine activities. It is imperative that you discuss with your primary insurance agent(s) exactly what your home, auto, or umbrella policies will or will not cover relating to equine activities, so you can seek supplemental coverage if necessary.
Protection:
Several companies specialize in underwriting equine insurance. Some club / association memberships also include insurance protection (e.g., the Georgia Horse Council), which may be helpful.
Two available personal protection policies that we recommend you consider are Individual Horse Owner's Liability and Care, Custody, and Control.
| Individual Horse Owner's Liability protects the policy holder from property damage and/or injuries (including death) caused by their horse. |
| Care, Custody, and Control protects the policy holder from liability due to the actions of a horse that they do not own, but was in their care, custody, or under their control. |
For example, if you were trailering your horse and a friend's horse to the state park for a day's trail riding, and something happened where both horses got loose. You are clearly responsible for the actions of your own horse, but it can (and likely will) be argued that since it was your trailer, you were in custody and control of your friend's horse too. Any injured 3rd party will most likely sue you as well as the horse's owner. These two insurance policies would provide you protection (to the policy limits) against both types of claims.