Loss Of Use Insurance
Permanent loss of use insurance can be pricey and is most suitable for competition horses or those with a ‘job’. It covers your horse if he becomes permanently incapable of performing the tasks he is insured for.
There are two types of loss of use policy. One covers accidental injury, such as a kick or fall, the other covers loss due to sickness, disease and accidents.
It is important you understand exactly what you are covered for. The majority of horse insurance claims come from sickness or disease and not external injuries.
For example, if your expensive show jumper injures himself and can no longer compete, you may be able to recoup some of his value under a loss of use policy.
Most insurers offer two levels of loss of use cover, usually 75% and 100% of the horse’s sum insured. The premium will be lower on the 75% policy, but, in the event of a claim, you will only get three-quarters of the horse’s value. To receive the full 75% or 100% of the horse’s value, he will have to be destroyed in the event of a loss of use claim. This means that the show jumper mentioned earlier, who may still enjoy hacking and schooling, would have to be put down for you to claim the full amount insured.
If you decided to keep the horse in retirement, most companies will pay a reduced percentage of the agreed value. Check your policy carefully to see how much you would lose (it can vary from 10 to 40%) if you keep the horse. In these cases the insurer should arrange for the horse to be freeze marked with an L inside a circle, so any prospective buyer will know he has been the subject of a loss of use claim.
Check also that your horse only needs to be incapable of one discipline for you to be able to claim. If you insure your horse for hacking and show juming and he becomes unable to jump but would make a lovely hack, you may not be able to claim.