Horse Economics. Catherine E O'Brien

        Replacement coverage on your barn(s). It is best to list barns as “other structures” rather than underwrite them as a separate endorsement to your policy, which can be more expensive.

        Schedule of artwork, antiques, and jewelry. This is a specific list of items of particular worth insured for their full value, which may be over and above the “jewelry” or “artwork” limit in your policy.

        Liability coverage of your horses both on and off your property.

        Coverage of legal fees should you need to defend yourself.

      You should also ask about:

       Covered perils, such as fire and wind. Some perils, sewer and septic backup, for example, may have to be added to your policy by endorsement.

        How to ensure all your property has adequate coverage and is represented properly under your policy.

        How to avoid becoming underinsured and keep policy limits current.

      Homeowner’s insurance saves you from financial loss by providing the means to rebuild structures or reacquire items that may be damaged or destroyed. While quite often nothing can prevent the occurrence of a disaster, you and your household will be able to put the pieces back together far more quickly with the aid this coverage provides.

       Automobile Insurance

      Automobile insurance provides a method of paying for specific vehicle-related financial losses during the term of your policy. In many states, drivers are required by law to carry liability coverage or no-fault personal injury protection to pay for losses they may cause others and medical and related expenses due to a car accident. Drivers often elect to also get collision and comprehensive coverage on their vehicle(s). Collision pays for any damage incurred if you hit another object or roll your car, and comprehensive coverage insures your vehicle in case of vandalism, theft, or breakage caused by fire, wind, flood, or other forces of nature.

      If you own a horse trailer, it is important that it is covered for both collision and comprehensive and listed separately on your automobile policy, because when your trailer is attached to a vehicle with liability coverage, it is covered for liability only. In this case, if your trailer is hit by another vehicle or a tree falls on it, your insurance will not pay for the damages sustained.

       Personal Liability Umbrella

      In our increasingly litigious society, many individuals provide their personal and financial interests an extra layer of protection by investing in personal liability umbrella policies. These offer coverage over and above your other types of insurance, such as your homeowner’s or automobile policies. A personal liability umbrella only activates when other coverage is exhausted. For example, if you are the cause of a major car accident involving several vehicles and numerous injuries, the damages you are responsible for may go well beyond the limits on your regular automobile policy. In this case, the personal liability umbrella could save you from financial ruin.

More often than not, this type of coverage is relatively inexpensive—and it could be invaluable as a protection for your current assets and future earnings. Those who can especially benefit from personal liability umbrellas include professionals, families with young drivers, owners of rental property, and sports enthusiasts (i.e., horseback riders, skiers, and boaters).

       Equine-Specific Insurance

       Personal Horse Owner’s Liability

      Most homeowner’s insurance policies do not cover equine-related exposures, so as a horse owner, it is prudent to purchase a personal horse owner’s liability policy. This policy covers your legal liability for bodily injury and property damage to others caused by your animal, and also any defense costs. Make sure this coverage is provided when the horse is on and off “owned premises,” so if you keep your horse at a boarding stable, you have coverage.

      Some insurers have restrictions: the personal horse owner’s liability policy will not cover exposures resulting from any type of commercial activity. This means that if you receive money or any other type of compensation for an equine activity, such as boarding a neighbor’s horse or giving riding lessons to a friend, you may jeopardize your coverage. In these cases, you need a commercial general liability (CGL) policy. This policy will cover personal horse exposures, as well as those that could be considered “business” exposures. (For more information on CGL policies, see p. 159.)

      Regardless of your insurance coverage, it is a good idea to use a waiver anytime someone rides your horses or spends time in your barn. “Susie from next door” might not dream of making a claim on your liability policy, but her insurance company could. Consult an attorney about items your waiver should include, and be sure he reviews and revises it for legal adequacy and accuracy.

       Equine Mortality/Theft, Loss of Use, and Medical/Surgical Insurance

If the purchase price of your horse was sizeable, and the money for a replacement horse hard to come by, equine mortality/theft coverage can be obtained. Many mortality policies offer an agreed value^♦ settlement wherein the purchase price of the insured animal is paid upon his death. (This is similar to term life insurance for a person, see p. 40.) They can include coverage for humane destruction in the event it becomes necessary due to injury or illness, and insure your horse in case of theft. Mortality policies usually provide guaranteed renewal coverage and extension provisions.

       SO YOU KNOW…

♦ An agreed value clause amends loss settlement provisions to the full amount an animal is insured for at the time of the loss. To explain: if you wreck your car, you are not going to receive what you paid for the car from the insurance company, but rather its fair market value at the time of the accident. This is relatively easy to determine with the help of a common car-pricing guide; however, no such guide exists for horses. An agreed value clause eliminates the need to determine the fair market value of the horse at the time of loss by guaranteeing that if you insure your horse for $5,000 and he dies due to a covered event, the insurance company will pay you $5,000.

      If your horse’s value is dependent on his ability to perform a specific function, such as jumping or racing, loss of use coverage can added to your equine mortality policy. This is similar to disability insurance for a person with an “own occupation” rider on his policy: if a heart surgeon is in a terrible car accident that crushes his hands and he can no longer perform intricate surgical procedures, his disability insurance will pay him a benefit. In the same way, if a horse can no longer perform his intended job, loss of use coverage pays the owner a benefit.

      Medical/surgical policies are generally riders or attachments to mortality/theft policies, and offer coverage for veterinary bills and costs associated with a severe injury or illness. They do not cover routine veterinary care and vaccinations, travel expenses, elective surgery, or holistic treatments.

       Insurance Overview

      When considering insurance companies, it is best to shop around for the best rates and coverage available. Enlist an insurance agent licensed in your state to help you with your search. Make sure the company is financially sound by checking the financial strength ratings with an agency, such as A.M. Best or Standard & Poor’s. You can also review a company’s “complaint history” filed with your state’s department of insurance. Consumer information, guides, and booklets are available through your state and the National Association