All horse owners are keenly aware that the cost of buying and keeping horses has increased dramatically over the last few years. We spoke with Meghan Mackenzie Bell, the Assistant Vice President Sales & Business Development, Henry Equestrian & Agri (powered by NFP), about the current state of the equine industry and why it’s more important than ever to have sufficient insurance coverage.
Are your experts seeing an upward trend in horse values overall?
Definitely. We see an increase in the average insured value of the horses we insure. Especially since COVID, there has been a sharp increase in the cost of horses. And it’s not just high-end show horses or racehorses, even the cost of foals – and prospective foals in utero, has significantly increased. Earlier, you could go out with $10,000 and find something pretty solid. But now, people are struggling to find sound, healthy horses – even ‘Steady Eddie’ school horses – for that price, which is tough.
When you look at the industry numbers, there has been a decline in the number of participants and for those who are breeding and selling. It has become more common for people to look at horses overseas and ship them to Canada, giving them a greater depth of horses to chose from.
Who determines the value of a horse before insuring it?
For a new purchase, we base it on the purchase price plus selected additional expenses – such as a pre-purchase exam, trainer commission, and even flight costs if you’re bringing a horse from farther away. If it’s not a new purchase (i.e., a horse you already own and want to insure), we usually recommend clients speak to their coach or trainer, who have a good grasp of the horse’s fair market value.
While there are appraisers available, we often don’t need them if you’re able to provide proof of your horse’s value, perhaps through actively showing the horse and providing show records. We have a Professional Justification of Value form, so depending on the [perceived] value of the horse we may need a professional to justify that value if it seems out of step with the industry. Maybe you have a green-broke horse and are wanting to insure it for $100,000; we would most likely request validation of this figure.
How much does it cost to insure a horse? What types of coverage are available?
The cost of insuring a horse depends on the company you insure with, and whether the policy is purchased in Canada or overseas. The value of the horse is what drives the cost of the mortality coverage ‒ typically, the cost ranges from 3 to 4 percent of the horse’s value. Additional medical and surgical coverage costs depend on the level of coverage you choose.
At Henry Equestrian we’re a brokerage, so we work with multiple insurance companies to find the right coverage for our clients. It is no different than if you have an insurance broker working on your auto policy, where the rates and the requirements for certain underwriting details originate from the insurance company, not your broker. Our goal is to simplify the process and advocate on your behalf.
What kinds of diseases and injuries are covered? Are there any that specifically aren’t covered?
Coverage eligibility varies; not all horses qualify for every type of coverage due to individual exclusions that may apply based on the horse or the insurer.
If two people each have a $20,000 eight-year-old horse, their available coverages could differ. For example, if there was medical coverage but one of those horses previously had strangles, that particular medical condition might be excluded. Another example would be if you had an older horse who might not qualify for certain coverages, or an owner who decided to only have specified perils and not medical coverage.
In Canada, most companies offer two main types of mortality insurance: specified perils, covering events like fire, lightning, attack by wild animals, drowning etc. and full mortality, which covers most risks except those specifically excluded. For example, sudden colic or a severe tendon tear requiring euthanasia could be covered. Additional coverages, such as medical and surgical or solely surgical, can also be added, particularly for major concerns like colic, where costs can be substantial, sometimes $15,000 or more.
What type of claims do you most often see?
My team see a variety of claims come in from clients, including colic, ulcers, fractures, dental issues, and lameness. These claims come in from owners of all different breeds and disciplines.
We’re all horse people, too, so we empathize when people send in their claims. Whether a horse is undergoing treatment at Guelph, or has suffered a sudden injury, it’s a deeply emotional experience. We are committed to compassionate service, understanding each situation because we’ve experienced similar challenges.
What would you say to people who don’t believe their horses need insuring?
Everyone has a different risk appetite. While one might consider it too risky not to insure a horse against medical or surgical costs, others might feel comfortable taking that risk, believing they can afford the cost of a new horse or handle a $15,000 surgical expense without insurance. However, I urge everyone to carefully consider their financial ability to handle such costs unexpectedly. Imagine the stress of deciding whether you can afford a life-saving procedure for your horse—it’s a situation no owner wants to face.
And it’s not only about medical and surgical coverage, but also liability coverage. If your horse kicks someone and you’re sued, sometimes home insurance doesn’t cover incidents involving livestock. While some might rely on their provincial membership for some protection, an accidental lapse could leave you vulnerable.
Even if you say you can afford to replace all your horses or cover high medical bills consider the potential for facing a lawsuit that could cost millions. We encourage people to purchase as much liability insurance as they can afford. Unexpected events, like your horse causing a road accident, can lead to prolonged and costly lawsuits. Adequate coverage is essential to mitigate these risks.
I recommend discussing your specific needs and concerns with an insurance broker. We’re here to help you navigate decisions related to horse insurance. That’s what we do all day, every day and we’re in it because we love it.
