Buying Horse Insurance Part 2

Kinds of Insurance:
Broadly speaking, equine insurance is divided into two broad types:

The kind of insurance you need as a horse owner or trainer, and
The kind that you need as a farm owner with employees, boarders, boarded horses, and/or breeding operations.

Insurance for Horse Owners/Trainers
A horse owner or a horse trainer needs liability coverage. Many horse owners or trainers are tempted not to buy this kind of insurance thinking that their homeowners insurance will cover them. Unfortunately, most homeowner policies have a specific exclusion for horse related claims, in one form or another. This is because home insurance companies don't want to insure any risk that comes from owning a horse, which makes sense, because most home insurance company risk analysts know nothing at all about horses. A good rule of thumb is to have enough insurance to cover the value of all of your property. Also consider getting "umbrella" insurance, which is relatively inexpensive if you have homeowner insurance already. Horse trainers will need commercial liability coverage, and will need to fully disclose to their agent the kind of business they operate and whether or not the farm where they operate has insurance. Many times, a farm owner will require the trainer to list them as an additional named insured in the event of a lawsuit for a claim arising out of the trainer's activities. Trainers can also ask to be named on a farm policy as an additionally named insured. In such a case, though, the premium will be more for the farm, and so some negotiations will have to occur regarding costs.

Then comes the issue of what kind of insurance you need for your actual horse.

Equine Mortality Insurance – This insurance covers payment for loss against death resulting from accident, illness, disease, injury, or humane destruction as well as theft and specified and optional perils. There are two broad types of perils coverage: Specified Perils, and All Risks. An exam typically is not required for Specified Perils, but then, most common kinds of causes of death, colic, etc., are not covered, so this insurance is less expensive. All Risks is expensive and needs an exam, though if you aggregate with a number of horses you can get the premium lower because it's a essentially a "quantity discount".
Agreed Value – Owners should know if their policy is one of Agreed Value or not. If it's an Agreed Value, they won't have to prove what the horse is worth if there's a claim. There are some exceptions; for example, if you entered the horse in a claiming race for less than the Agreed Value, you'll only get that lower amount. These kinds of things are often common sense, but can come as a shock to the uninformed owner.
Loss of Use – This is another kind of insurance. Loss of Use can be external, (accident) or internal/external (illness). This also has some fairly specific triggers for claims, and also definitions of what constitutes a loss of use. This insurance can also be expensive, so reading and completely understanding the policy is important.
Major Medical – Major Medical is another endorsement available. This can be negotiated and does vary depending on the company; it can also differ depending on the amount of deductible, the types of costs covered, and veterinary requirements for approved coverage.
Humane Destruction Clauses – These clauses allow horses that are covered for mortality to be euthanized if an extremely painful condition (e.g. colic) occurs requiring the horse to be put down. This is coverage that can be easily defeated if the exact rules are not followed, so be sure you read this policy in detail before pulling the trigger, so to speak, on a horse in distress.