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What Is Your Horse Worth?

How to Determine an Equine Insured Value

Equidae insurance presented “Think You’re Covered?” in the premiere of the UPHA webinar series LET’S TALK ABOUT THAT. This now-on-demand presentation in the UPHA website encouraged policy holders to look at insurance from a risk management perspective and armed them with the tools and resources for successful dialogues with their own insurance agents.

This blog includes a popular topic from the webinar discussion on how to set the insured value of a horse, as presented by Equidae Agent, Suzy Shiflet. We’ll be presenting more insights from this webinar in future blogs, so we encourage you to return to this page monthly and further broaden your understanding of equine insurance.

There is no magic formula to determine a horse’s worth. To many, the sentimental value of their horse is priceless. However, factors including purchase price, show records, whether the horse is a young investment and whether a horse is a member of a family are all worth considering. How a client determines their horse’s worth varies, but insurance carriers look at value as a black-and-white line item.

Initially, if a horse is bought today for $5,000 -- for that day and the next six months -- the horse's insured value is $5,000. After six months, a Justification of Value (JOV) form can be completed to prove the horse has increased in value. The JOV form includes show records, lineage, and siblings. In addition, 50% of training costs can be applied towards a requested increase of value.

For example, if a policyholder wants to increase the $5,000 example horse to a $10,000 value after six months as an insured, the JOV would include several supporting details, including the afore-mentioned training costs. If the trainer charges $1,000 per month, the owner has spent $6,000 on training within the insured six-month period. But remember, only 50% of training can be applied to a requested increase in value, so only half of the training costs -- or $3,000 -- can be added to the horse’s $5,000 initial value on the JOV form. If the example horse has won at every single horse show it's entered, those shows should be listed on the form as well. The horse’s dam and its sire should also be included, as well as any successful siblings, like a recent World’s Champion half-brother on the dam’s side.

Once the JOV form is completed, the carrier will determine if the value of the horse -- and thus its insurance coverage -- can be raised.

It’s a personal choice whether you want to cover just your initial investment or what you believe your horse is worth. You must determine the value that is right for you.

SETTING A YOUNG HORSE’S INSURANCE VALUE

Application for young horse mortality insurance may take place at several different points during a young horse’s life. Before a foal is born, you may insure the mare in utero after 42 days of gestation. Twenty-four hours after the foal is born, another insurance opportunity exists. Once a vet check is performed and all required testing is completed and passed, the foal is insurable. A foal without a vet exam can be insured 31 days after birth.

To determine the value of a foal for mortality insurance, the stud fee is multiplied by two or three (depending on the age of the young horse). Most Saddlebred foals, however, can be insured for $15,000, and, at that value, medical coverages are available for them. Young horse estimated values can be increased for other reasons as well, including recipient mare costs, futurity winnings, sales transactions of siblings or dam production records. Remember, these are all points taken into consideration by the insurance carrier and are not guaranteed for all young horses.

Determining each horse’s worth will vary, so talk with your insurance agent and, together, decide the equine insured value that works for you.

The one-hour webinar “Think You’re Covered? Let’s Talk About That,” presented by Equidae Insurance agents Stacey Halloran, Billy Jarrell, Priya Arora and Suzy Shiflet, is now available on-demand to UPHA members through their website: https://www.uphaonline.com/. We encourage UPHA members to visit this website and access a library of Equidae-sponsored webinars with topics ranging from retirement planning to taxes to structuring a business to insurance hot topics. For non-UPHA members, stay tuned to this page as we bring some of these topics to you.

For more information about equine or farm insurance, or if you have a topic you’d like to see covered in our blog, please contact us directly at: Equidae Insurance, Inc. 608 Virginia Street East, Suite 302 Charleston, WV 25301 p. (304) 346-1198 f. (304) 345-3535

Stacey Halloran, Agent
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