Posted 22-Feb-2023 10:56:15
Category: Broadstone Equine
Foal Insurance Explained
Late Winter/Early Spring is foaling season for most of the country, so if your evenings will soon revolve around foal watch, now is the time to consider how to insure the next addition to your equine family.
Full Mortality (life) insurance is available for most foals once they are 24 hours old. For these newborn foals, a complete vet exam, including results of an IgG test to ensure the transfer of passive immunity from mare to foal has been successful. So, if you want to insure your newborn foal, you will want to make sure a vet is available to examine him or her, and run the IgG test. Some insurance companies may also require the results of a CBC, so make sure to discuss these details with an agent prior to the foal’s birth so you can be best prepared.
Emergency Colic Surgery
Most insurance companies’ Full Mortality policies include some amount of free Emergency Colic Surgery coverage for horses without a history of colic and gastrointestinal issues. For some companies though an exception is made based on the age of the horse. For example, the endorsement might not be available for foals under the age of 30 or 90 days, or there may be no restriction. When working with an agent to see about insuring your foal, make sure to check to see what options are available for your foal.
If you are also interested in Medical/Surgical coverage for your foal, that coverage is available for foals age 30-90 days old (depending on the insurance company). Some owners choose to insure the foal as quickly as possible, and then add the Medical/Surgical coverage by endorsement when the foal is eligible (keeping in mind the foal must be sound and healthy at that time). Other owners wait until the horse is old enough to have both Full Mortality and Medical/Surgical coverage before beginning a policy.
Important Detail: Many equine insurance companies will not offer Medical/Surgical coverage on horses under a certain insured value, typically between $7,500 - $20,000 (depending on the company). We work with at least one company that does not have a minimum value requirement in order for a horse to be eligible for Medical/Surgical coverage, so keep that in mind as you talk about options with an agent.
Foals may seem like a safe investment, being carefully tended to by their mothers and human caregivers, generally protected from the elements, and not in any sort of athletic training. Unfortunately though, they face some challenges due to a vulnerable immune system, a gawky and often not quite yet coordinated muscular skeletal system, and a definite lack of common sense. These factors add up to higher risk of illness and serious injury, which is why the rates for Mortality insurance for foals is higher than adult horses (see below for details). Considering the time, effort, and expense put into getting a mare pregnant and producing a live foal, protecting your investment with insurance is worth consideration.
Underwriters will typically insure a newborn homebred foal (meaning you own and bred the dam) for three times the stud fee you paid (for one breeding – if it takes more than one breeding to get the mare in foal, they will not include those additional stud fees). The underwriters typically do not take into consideration any other expenses related to getting the mare in foal, or for broodmare maintenance or care. Also, if the broodmare is insured for Mortality (and/or Medical/Surgical coverage), no coverage extends to her foal.
As the young foal grows up, underwriters will review a performance record if the filly or colt is shown in-hand or goes through a breed or association inspection or testing process.
Then as training is put into the horse, underwriters will consider the expenses paid for a professional trainer, or if the owner is a professional, the amount that person would typically charge a client for the same type of training.
In addition, recent sale prices of half or full siblings and/or performance records of dam or sire could also come into play over time.
Important Detail: You are not restricted to insuring your horse for the original value on your insurance policy. If during the policy term you believe the horse’s value has increased, you can provide substantiation to the underwriters to see if they will consider a higher value. You can also see about adjusting the horse’s insured value each year as your policy is due to renew. Your agent will be happy to go over these options with you.
Rate & Premium
The younger the horse, the higher the rate for the Full Mortality coverage. The typical rate for foals 24 hours – 30 days old is 6 – 7.25% of the foal’s insured value, depending on the foal’s breed, sex, and the insurance company offering coverage. So, for a foal value at $5,000, the annual Full Mortality policy would be $300-363. Most companies reduce the rate some time between 7 and 31 days to between 4.5-5.75%. And for youngsters at the age of one year (remembering that a young horse is considered a yearling as of January 1 of the year following its birth), rates are around 4%.
Important Detail: As they hit various age milestones throughout their first year of being insured, the rate does not decrease. So, if you decide to insure your foal at 24 hours old and the rate for the Full Mortality coverage is 7%, that is the rate for the entire first one-year policy. At renewal after that first year, the rate for a yearling would apply, so the premium will decrease.
**These blogs are for basic information purposes only, and do not constitute advice from Broadstone Equine Insurance Agency, a division of Marshall and Sterling Insurance, or its affiliates. Contact our office directly at 888-687-8555 or info@BroadstoneEquine.com to contact an agent for complete and current information regarding all coverages.
2023 New Year’s Resolution - Get Horse Insurance!