Welcome all:

The idea behind this blog is to create an open forum for discussions, a topic specific place where you can ask questions or read about insurance matters related to horses.

We will discuss horse mortality insurance (life insurance on the horse), medical / surgical insurance for horses, liability issues surrounding horses (both personal liability and commercial liability), farm insurance and everything in between.

This particular installment is about the basics of insurance…

Question:

What is insurance and why do we/you need it?

Answer:

Well, the short answer to this is that you may only need insurance as a means to defer risk to someone else (the insurer) for things that you are exposed to which might cause you loss or damage that you do not want (or cannot) deal with on your own… (that was a mouthful, I know.)

Looking at it from a different angle.. if you are prepared to accept the risk of loss by yourself, or unless you are contracted or obliged to insure the legal interest of someone else (like a Mortgagee or Lessor) then you do not need insurance.

Insurance is a tool, nothing more, nothing less. This “tool” happens to be in the form of a policy – or contract - that you voluntarily enter into with an insurance company. In the contract, the insurer agrees to pay for specific losses that you suffer, in trade for a premium (payment). Your premium goes into a pool of other premiums that have been set aside to pay losses when they do happen, so when “your” loss occurs, the insurer has sufficient means to put you back into the same position you were in (financially) as you were before the loss occurred…simple, right?

One more angle. The losses of the “few” will be paid for by the fortunes of many. That basic premise is how the insurers thrive or (depending on their loss history) lose money. If the insurer pays out less in losses than they had clams made against them, they make money, or conversely, if they pay out higher amounts for losses incurred than they collected in premiums, they lose money.

Fact: In Canada, horse insurance is available through brokers, who represent many insurance companies.

Fact: In Canada and in the horse insurance industry specifically, there are only a few horse insurance specialists, but in spite of the relatively small number of sources, the market appears to be fully served at this time. Very few people who are involved in horses will not know or be able to find a horse insurance broker to have their needs met by simply searching the web for horse insurance in your province.

Next installment, we can get down to brass tacks about what types of insurance are out there for horses and their people. Remember, if you have any questions, let me know.

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