Equine insurance experts answer your questions about insuring Thoroughbreds for the breeding and auction realms. Email us at [email protected] com if you have a question for an insurer.
QUESTION: When should I consider increasing or decreasing the insured value of my horse, and how do I do it?
BRYCE BURTON: There are various reasons that a policyholder would want to amend the insured value of their horse, which is done in order to accurately cover the horse for its true value.
For a racer, the owner would want to increase the value if the horse has won a race that inherently increases the value of that horse, or even if the owner has received an offer for the horse, which is higher than what that owner currently has the horse insured for. The same goes for decreasing the value of an insured horse, which would normally be done if the horse is dropping in class, for instance, from an allowance race into the claiming ranks.
With respect to broodmares and foals, an event within the family could spark the need for an increase. For example, if the first foal out of an insured mare were to win a big stakes race, it may be worth looking into increasing both her insured value and potentially any of her promising foals.
Depending on the size of the increase, either a veterinary certificate or a declaration of health, which can be completed by the owner, will need to be completed on the horse. Once approved by the company, the increase or decrease in value will be calculated on a pro-rata basis. This means that you will only be charged for your time on risk for the increase. So, if the increase is put into effect six months into the policy period, you will only pay for that increase for the remaining six months.
QUESTION: Can the Full Mortality Rates provided by the company be changed in the middle of a policy-term?
BRYCE BURTON: Yes. If the insured horse's use is changed in the middle of the policy period, the rate will be changed respectively. The most common example of this that we see is when a horse is retired from racing. If it's a filly and she is taken off the track to be bred, we would decrease her Full Mortality Rate mid-policy term and the insured would receive a return premium, or credit, for the remaining time on risk. The same would be true if a gelding were retired from racing and re-trained for another discipline.
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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