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Equine Insurance Insights: for Carriage Drivers

Submitted by: Danielle Aamodt
Phone: 267-972-1491
Email Address: DanielleAamodt(at)gmail
Date Added: 6/21/2016


Driving people tend to accumulate lots of stuff. You may not even notice it until you start playing trailer-Tetris with harness, carriages, barn supplies... then the horses. It's in moments like that when you stop and think about how much you own & how much it all costs. Hopefully you're saying to yourself "boy, I'm glad I have insurance!" And if not, then ask "I wonder how much it would cost to insure this?"

The truth is: insurance is just as necessary at home as it is on the road. The caveat for people in the Driving sport is not only realizing the value in property insurance (that's easy to see with a packed trailer), but also understanding their Liability exposures. With carriage driving, there's a lot involved: harness & carriage (either owned or borrowed), one or more horses, then the driver, groom(s), passengers and even spectators on the ground. With the slip of a rein or one broken leather strap, there's a lot more equipment and people at risk than most equestrian sports.

DO YOU...?

- Own / Lease horses
- Offer lessons / training
- Ride / Drive at home or away
- Board someone's horse
- Sell horses professionally
- Transport horses for clients
- Own a Farm, equipment & carriages
- Lease carriages & harness
- Organize Horse Shows / Clinics
- Manage a Driving Club

The type of policy you need will depend on: Ownership, Location and/or Activities.

There are a handful of companies that will insure horses, and their coverages are all similar at the end of the day. A Mortality policy is the base policy, which allows Owners to recover the insured value of a horse if they are lost due to death, necessary euthanasia or theft. It sounds like a Life insurance policy, it works differently as horses age; premium rates increase when horses are 15 + years old and eventually (between 18-20 years old) the coverage won't be available anymore.
You can also opt for Major Medical &/or Surgical coverage to add to your horse's Mortality policy. This is where companies really vary on their options. Most offer it as a Veterinary reimbursement program, often with deductibles (per issue) and copays. Pre-existing health issues may be excluded. Medical coverage will reimburse you for Vet bills from injury, illness, accidents and disease. It is not meant to cover regular maintenance, like annual vaccines, deworming or dental exams. The question you should ask yourself is: "What would I do if..." If your horse needed Surgery, would you proceed? If your horse was lame, would you do the diagnostics & treatment to bring them back into work? Or would you just give them 6 months off to recover instead? If you opt for full treatment, then consider Medical insurance. If not, then you should know that if your Vet recommends your horse as a candidate for Surgery & you decide to euthanize instead (which isn't wrong, necessarily) - your claim for Mortality coverage may be denied. Keep that in mind when purchasing coverage.

How do I determine the value of my horse?
If you just bought the horse, then the purchase price is the fair market value. If your horse was purchased a while ago, then you'll need something more to establish a value, because a $50,000 show horse that stands in a field for a year would be hard to sell for the same price. Likewise, horses can increase in value as you add training / showing experience. If you didn't purchase the horse, but traded, adopted, or even acquired one for free, then you'll need to work with an agent on establishing value. Keep in mind, the insurable value is not what they're worth to us (because who could put a value on that?), but it is rather the cost to replace them with a horse of similar training and experience.

If you have a formal lease agreement (and you should!) to use a horse for personal use, you can still obtain a Mortality and Medical policy for them. [*Trainers need a different policy] Coverage is the same, with the Owner listed on the policy and a copy of that Lease agreement on file. Owners leasing horses or equipment to other people can also opt to get a policy in their own name, and add the Lessee to the policy. This option may even be preferred. Let's say Amy leases her horse to Bill and the horse is returned due to an injury; if the policy was written in Bill's name, then the coverage would cancel the date he returns the horse. If, however, Amy had written a policy in her name (& listed Bill on the policy as Lessee) then when her horse is returned, she would still have the coverage in place to continue treatment.
For leased carriages & harness, certain companies will offer Annual Tack & Equipment coverage based on the value of the item. It's fairly inexpensive too. This coverage would insure against loss due to fire, extreme weather conditions, damage during transport, or theft. A big gray area in this coverage is for damage caused to the carriage while driving a horse, even if it was an accident. The policy technically excludes any damage caused by negligence of the owner or Lessee. A licensed claims adjuster would determine on a case-by-case basis if the coverage would apply or not. Let's say it's not guaranteed.

Liability seems to be the invisible monster that people prefer to ignore. Unless you have been involved in a big accident, you may not understand the unforeseen expenses that you could be up against. In extreme cases, we're talking about responsibility for bodily injury, medical bills, rehabilitation, long-term nursing care, lost earnings, and even funeral expenses. I know from personal experience that something as simple as a broken arm can cost up to $50,000. Even if a person's health insurance pays the bill, you can still be on the hook for it. If you have a Liability policy in place with the correct coverage, it will respond in your defense, whether or not you are at fault.
As drivers, we love to share our sport with friends and each other. But how often do we consider the risk involved with a pleasure drive down the road? Even when the horse is reliable, you could experience equipment failure or a passenger blunder that will turn your drive into a bad situation. I know someone whose carriage was rear-ended by an incapacitated driver in a car; she was thrown several yards from the carriage and incurred injuries that took her years to recover from. (The horse ran. He was okay, other than mental trauma) Even when nothing is going wrong, something can go wrong. While insurance won't prevent bad things from happening, it can protect your finances from the devastating aftermath.

Even if you don't consider yourself a professional, you may want to pay attention. If you offer to train horses, sell horses, offer driving lessons or clinics, borrow or board someone else's horse (even for free) – you could be held liable for it! Driving trainers are few & far-between in some states, so many of us help each other out. If you find yourself offering some of these services (especially if you're earning an income), then you need to consider a Commercial Equine Liability policy. This coverage is meant to protect you against claims for any property damage or bodily injury that these horses may cause to others (third-party). Care, Custody, Control coverage will insure your responsibility for other people's horses, if they are injured or die while in your care. An insurance agent can help you navigate each type of coverage. Policies are customized to your specific activities, so be sure to mention everything you're involved in; even if it's only an occasional lesson or keeping a friend's horse on your property for free. You may not realize the liability exposures involved, but an agent will.

True Story: my office received a call one morning that made everyone snicker. We had a client open a claim for Personal Horse Owner's Liability coverage included in her Farm Package policy. Over the holiday weekend, she had invited friends and family to her farm for a BBQ. Her non-horse-savvy friends parked their car right along the pasture fence. Her naughty, attention-hungry horses proceeded to scrape their teeth along the ENTIRE length of the car, leaving terrible paint damage and dents on the vehicle. Since she had liability insurance to cover the damages, she was able to laugh about the unfortunate event rather than cry! You don't have to be a trainer or even go off-premises to need liability coverage. Personal Horse Liability policies are obtainable at very reasonable prices and can turn a bad day into a funny story that you tell your horse friends.

Horse Shows and Events can acquire liability policies on a Short-term basis or as an Annual policy (with over 4 show days). These policies are meant to protect the Event & organizers against damage or injuries caused by their show, staff or volunteers. Participants & Volunteers assume their own risk; however, the policy would still defend the insured if it went to court.
Clubs require a unique type of insurance policy, which protects the Club's assets (& member assets) from damages / injuries caused to third parties. A member cannot sue against the Club's policy, because they are technically considered 'the insured'. Club policies can include all types of activities such as Horse Shows, Clinics, Trail rides, Temporary boarding, and even Year-end Parties or Meetings.
Volunteers, just like grooms or passengers, are technically a willing participant at horse shows or other events. This is where State Equestrian Liability limitation laws help in declaring that if a person willingly participates in an activity involving horses, they understand the dangers and they are assuming their own personal risk. Liability policies are not designed to pay-out to willing participants, even Volunteers at a horse show. (This is why Volunteers, grooms, passengers, even friends should sign a Liability Release waiver – to state that they understand responsibility of this risk) But as I've said before, if a situation turns into a lawsuit or an insurance company is subrogating the funds against a Horse Show organizer or Club, the Liability policies WILL respond in their defense whether or not negligence is proven in court. That is what the Liability policy is for: protecting YOU.


"My friends would never sue me."
Simply put: it's not guaranteed. With unexpected bills, some people would have no choice but to pursue legal action. Even when your friends choose not to sue you, if their insurance company pays for damages or medical bills, the company holds the right to subrogate damages against any negligent parties involved. You can still be exposed to a lawsuit from an insurance company.

"I have a Homeowners policy that covers my Liability."
While homeowner's policies do include liability coverage, it may not cover your equine activities. Some P&C Agents will tell you that your horses are included, but they may not understand that you are taking your horse off-premises to shows or offer rides to your neighbor's kids. Unless your agent specializes in the Equine industry, they may not realize the extent of your activities and the risks involved. Be direct; never assume! If you own a Farm, then you really need a Farm policy package including Property, Liability & even Auto, Excess / Umbrella coverage.

"I have an Equine Liability policy, so my friends or grooms have protection if they get hurt while riding with me."
Wrong! Liability policies are designed to protect YOU, not your friends or grooms. If your passenger were to get injured, their health insurance policy would be responsible for their medical bills. Your liability coverage has a small amount allocated as 'Medical payment' for an injured party, but it is minimal. Once a health insurance company has paid out on medical bills, the company has a legal right to turn around and subrogate against any negligent parties for the incurred costs. Whether you are at fault or not, that is when your liability policy comes into action to defend your case and pay a claim if you are found negligent. Your friends don't receive a claim payment, unless they also sue.

"I'm protected by signed release waivers or my State's Equestrian Liability Limitation Laws"
While both Release Waivers & State Statutes are important for the equine industry, they will NOT protect you from all lawsuits, especially if you're claimed negligent. You should require all willing participants in Equestrian activities to sign a Liability Release Waiver acknowledging that they understand the risks involved. That may be what saves you in court. But the cost of defending yourself in court will still be a burden without liability insurance.

A little personal advice: When applying for insurance, be honest with your agent. There's no benefit to keeping information from them. Without the right coverage in place, it can't help you! In my experience, people can be apprehensive about divulging details about their horse business. Your insurance agent is on your side, and a good agent will help you understand why the coverage is important. (We speak from experience!) Let them help you find a balance between the insurance and premium that allows you to sleep at night.

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