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Race horse coverage is long shot

Restrictions and price cause many owners to forgo insurance

By Phil Zinkewicz

When Barbaro, this year’s contender for horse racing’s Triple Crown, shattered his right hind leg and broke down just seconds into the running of the Preakness following a dynamic showing at the Kentucky Derby, horse racing fans all over the country—and perhaps the world—gasped in disbelief. To the uninitiated, it seemed difficult to believe that the equine athlete, who showed such heart, strength and stamina in his Derby win, should suffer such an unexpected injury, leaving in doubt whether the horse would ever run again or, indeed, whether he would even survive.

But those involved in the world of racing are all too aware that thoroughbreds are delicate creatures, very often high-strung as the result of strict training regimens and often subject to intense schedule pressures from their owners. Barbaro’s unfortunate, unanticipated injury made headlines as the result of the situation surrounding the breakdown.

And small wonder—a Kentucky Derby winner, on the way to the Triple Crown with a promising racing future ahead, falters in front of more than a hundred thousand people and on national television. However, there are many other instances of race horse injury and even death that often go unnoticed. For example, just a few days after Barbaro’s fall, a horse named Lauren’s Charm suffered a heart attack in the backstretch during a race at Belmont Park and died. This event went relatively unnoticed in the press, as do other instances of horse race injury and mortality.

The equine insurance industry is well aware of the exposures that exist in horse racing. The insurance market for race horses is elite and restricted when considering the number of races and the high monetary values associated with them. It is estimated that the worldwide capacity for any one horse is below $30 million, not a great deal of money when one considers that Barbaro’s worth might have topped $40 million had he won the Triple Crown. Moreover, equine insurance for race horses is extremely expensive and for some owners unaffordable.

Experts is the field of racing point out that race horses are at particularly high risk because, when a race horse is in “full run,” the horse is usually touching one leg on the ground at a time. They say that most race horse owners can’t afford insurance. They also note that the owners of a top horse like Barbaro might pay premiums amounting to 4.5% to 5.5% of the value of the horse, so a $10 million policy could cost around $500,000 a year.

It has been reported, though not confirmed, that Barbaro’s owners, Roy and Gretchen Jackson, had purchased two types of insurance on the prized colt—a mortality policy with a death benefit, and a policy providing coverage if the horse is unable to fulfill his potential as a stud. It appears that the Jacksons have had to pay all the veterinary bills out of pocket.

Muirfield Insurance of Lexington, Kentucky, is one of the largest equine insurance brokers in the country. The agency’s president, Michael Levy, told Rough Notes that the primary coverage for race horses is all-risk mortality (ARM). “There is no coverage for loss of use for a race horse,” he said. “The coverage is for sickness or accident that results in a horse’s death. Writing loss of use coverage on a race horse just wouldn’t be good business, considering the potential for loss that exists. Medical insurance is available for race horses once they are retired from racing. But while the horse is still performing as a racer, there is no medical insurance available.”

Levy said the largest single claim on a race horse was for Dubai Millennium, who died in April 2001 from grass sickness. The horse’s death brought in a claim for $36 million. In 1990, a great stallion named Alydar had to be put down when he kicked a wall in his stall, shattering his right hind leg. Owners at Calumet Farm said the horse’s temperament was always unpredictable and that probably contributed to his leg injury.

Rough Notes asked Levy how the determination is made to put down a horse after a leg injury. In the case of Barbaro, a tremendous effort was made to keep the horse alive even though the owners had mortality insurance, which would have been paid in the event of the horse’s death.

“The decision is in the hands of the attending vet,” Levy said. “Whether or not there is insurance, if the vet determines there is a chance to save the horse’s life, the owner must make every effort to do so. The owner must incur the medical expenses, but often they’re not all that high. Besides, owners become very attached to a horse. They really care about the animal and want to do all that’s possible to keep the horse alive.”

Show and pleasure horses

Levy’s agency specializes in race horses, but there are other agencies that handle show horses or pleasure horses, and in these areas, the insurance market is significantly different.

Jorene Mize, owner of the North Fork, California-based agency that bears her name, provides markets for horse boarding stables, guided trail rides, horse and riding clubs, horse trailers, personal horse owners, pony rides and trainer’s insurance. Unlike with race horses, major medical insurance is available, as are coverages for surgical procedures and loss of use. Mize also says that the insurance market for these equine risks is not restricted like the market for race horse coverage.

Mize’s involvement in equine insurance began quite by chance. “I was right out of high school and was looking for a job,” she explains. “I obtained a job in an insurance agency and after a while, I decided to strike out on my own. I had a book of business as my base, including home insurance, trailer insurance and catering trucks. But I also had horses of my own and decided to make equine insurance part of my book.

“But writing horse insurance is unique and can be difficult for a general agent,” Mize continues. “There were not then—and still aren’t—educational courses available for writing equine insurance, so I had to learn from scratch. I began asking insurance companies questions about horse insurance, and that’s where I received my education.

“I began to understand what insurance companies want to write in the area of horse insurance and what they don’t want to write,” she continues. “For example, most insurers don’t want to write mortality insurance on horses used for commercial purposes—i.e., trail rides, pony rides, etc.—because different riders create stressful situations for horses. But other coverages are available.”

Mize became so knowledgeable about horse insurance that, on her Web site (, she now fields questions from horse owners and other interested parties on the subject. One of the most frequently asked questions, she says, is: How much will it cost to insure my horse?

“Premiums will vary depending on the breed and age of the horse, the value of the horse, the use, the residence, and other factors,” she says. “Mortality coverage is similar to life insurance and is for the value of the horse should it die or need to be euthanized, in addition to providing for colic surgery coverage of up to 60% of the value of the horse, with a maximum limit of $3,000,” she continues. “Extended coverages are available for increasing the surgery and medical coverage, as well as loss of use, infertility or named perils. Additionally, there are different types of insurance available. For instance, personal horse owner’s liability insurance protects the owner should the horse cause damage to a person or property.”

One of the more unusual questions Mize was asked was: Can you insure my reindeer?

“This came from a woman who had already insured several horses and later purchased some reindeer, as a novelty, planning to offer sleigh rides,” says Mize. “At the time the question was asked, there were no insurance companies that I knew of that would insure a ‘wild’ animal for more than a 30-day holiday period. Since then, however, I have identified a company that will write elk, deer, camels, exotic cattle, miniature donkeys and ostriches. To be honest, I haven’t written any of this business as yet, but the insurance market is there.”

Getting back to horses, Mize says independent agents should consider whether their clients have horses that need insurance coverages. “I am amazed that I work out of California and I receive many requests from other parts of the country for equine coverage. I wonder why agents in those states are not considering equine insurance as a source of income.” *