Equine insurance experts answer your questions about insuring Thoroughbreds for the breeding and auction realms. Email us at info at paulickreport.com if you have a question for an insurer.
Question: If the racetrack where my horse resides is put into quarantine due to an outbreak, such as EHV-1, can this affect his or her ability to be insured or the cost to do so? What if the outbreak stems from the barn the horse is in, but he or she is not infected? Is there a statute of limitations on how long it is affected?
Bryce Burton: Yes, viruses such as EHV-1, or any other kind of outbreak for that matter, can absolutely affect a horse owner's ability to place new or increase Full Mortality Insurance coverage on their horse without any exclusions. The timing of the outbreak with respect to whether the horse in question is already insured at the time of the outbreak, or if the owner is applying for new coverage following the discovery of the outbreak, is the determining factor here.
The underwriting companies have the right to include something called an exclusion within new Full Mortality Policies for certain pre-existing conditions. So, if the horse owner were to apply for coverage and their horse has a health issue, or has had a health issue within a certain timeframe, the company will likely exclude that specific condition from the policy until the condition no longer exists. Full Mortality coverage can still be placed on the horse for all other causes, however, any loss directly or indirectly caused by or contributed to by the excluded condition will not be covered.
With that being said, it is likely that in the case of the EHV-1 outbreak, the company will choose to exclude EHV-1 on any horse applying for coverage which has been in contact with the barn associated with the outbreak. Policies written prior to the outbreak and horses covered on those policies would be fully covered, as long as there was no exclusion listed at the time of inception.
The underwriting decision to write the Full Mortality coverage in general may vary from company to company. The same would apply to the length of time that the Company may require before coverage can be bound without an exclusion. Generally speaking, a veterinary exam and a clean veterinary certificate would need to be submitted to the underwriters for review, following that specified amount of time, before they would consider placing coverage with no exclusion.
Bryce Burton is a property and liability specialist for Muirfield Insurance. He is from Frankfort, Ky., where he grew up an avid race fan. His Thoroughbred racing fandom combined with a collegiate internship in the insurance industry, culminated in a start in the equine insurance field. Bryce has been with Muirfield Insurance since 2014, following his graduation from Transylvania University in Lexington
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