Insurance 101 with Mike King - Horse Insurance and Related Coverages

In previous postings, we have discussed some points related to insuring the horse itself… but what about other horse related insurance policies that are also considered somewhat specialized?

Several types of coverage pop into my mind and we will post information on the first here and now:

1. Farm insurance:

This may seem all too obvious, but after many years working in the business, insurance that is actually designed for property where horses are present is actually very much a specialty product and one that requires a measure of expertise to identify all risk exposures that might be found on the property.

With the thousands of agricultural and rural properties in Canada there is no doubt that basic insurance coverage for fire and other basic perils on a house – even if it is not protected by a fire hydrant – is relatively easy to obtain. Of the several hundred underwriting insurance companies who offer coverage to consumers in this country, many will happily accommodate a policy that covers the “house in the country”. Interestingly enough though, it seems that once the many assets and exposures that exist on a typical farm are added to the mix, the wheels of the mainstream insurance industry seem to fall off in a hurry.

Many insurance companies (read “most”) do not really want to cover buildings used for agricultural purposes (barns / arenas, hay sheds, implement storage, run-in shelters etc.) and notwithstanding the fact that many consumers believe they have coverage for these separate structures “automatically”, the fact is that if these types of structures are not specifically described (dimensions, use) on the policy, the chances are quite high that they are not insured at all. On reflection, most would agree that agricultural buildings do represent a different type of risk as compared to the urban dwelling. Fire prevention and detection tools (extinguishers, smoke and fire alarms etc.) are often inadequate, out of date or non-existent, there are more combustible items including dust, hay, bedding etc. that exist and these special hazards need special attention.

Once we get beyond the basic house and barn, you should also be considering things like “farm machinery” and the difference between “ farm machinery” and “implements” and the practicality of insuring these separate item categories.

And what about other assets, such as fencing, tack and equipment, the basic tools needed to keep the barn clean… and the list goes on.

As a matter of good risk management, we urge all of our farm clients to inventory ALL assets on the farm and then decide what they wish to protect by obtaining an insurance policy and what items they wish to self insure. By going through the exercise of considering the scope of the assets and then analyzing the exposures that are present, the insurance policy that is ultimately obtained can be properly described as just one of many tools to protect the owner against loss.

In closing, it should come as no surprise that many consumers do not read their insurance policies and have little idea as to what is actually covered and what is excluded. A friendly piece of advice is to take the time to READ the policy you have purchased – thoroughly. If you have a question about your policy, ask the person who sold it to you to clarify the nuances of a sometimes complex contract document. And remember, the adage that you get what you pay for will absolutely apply when it comes to insurance.

Mike can be reached through this site or mking@intercityinsurance.com

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