Loss of use cover
Not everyone takes out loss of use insurance. If you think that it could be a good option for you, but don’t know much about it, here’s the lowdown
What is it and how does it work?
LOSS OF USE (LOU) insurance covers your horse if he becomes permanently incapable of doing the activities for which he is insured and used for,” explains KBIS. “So if your horse is a showjumper, for example, and he sustains an injury meaning that he can no longer showjump, a claim can be considered — but only if you insured him to showjump at the start of the policy.”
You can see, then, how important it is to tell your insurer exactly what you’ll be doing with your horse. Loss of use is a permanent status; once a LOU claim has been made and paid, your horse can never again be used for the activity or activities the loss of use claim was made on.
Your horse may undergo many months of treatment and rehabilitation before it becomes clear that he can no longer work. Only then will it become a potential loss of use claim.
The options when claiming
“The amount paid out is based on a percentage of your horse’s insured value,” says Petplan Equine. “You’ll have a choice at the start of the policy on what this will be. With Petplan Equine you can choose to insure for 60% or 100% of the sum insured.”
If the worst happens and you have to go down the loss of use route, you can: n Retire your horse and keep him. n Give him another ‘job’, such as hacking. Your vet fee cover may be limited, however. n Have him put to sleep.
“The percentage pay-out is based on the market value or sum insured (whichever is less),” adds Petplan Equine. “If you choose to insure for 100% loss of use cover, we will pay this minus the amount the horse is now worth based on what he’s capable of doing. If you chose 60% loss of use cover, we’ll pay 60% of the market value (or sum insured, whichever is less).”
If you choose the retirement option, your horse will need to be freezemarked with an ‘L’ to show he’s been through a LOU claim.
If your horse is still capable of breeding, you’ll most likely only receive part payment.
Loaning or selling a LOU horse
“When an insurance provider pays out on a loss of use claim,” says solicitor Rebecca Stojak of Geldards law firm, “they don’t own the horse, so the owner can sell him on or loan him out if they wish. It’s not illegal to do this, but the owner needs to make it really clear that they are selling a loss of use horse, and specify what he is and is not capable of doing.”
The issue here is that if the horse keeps getting passed on, the reason why he was a LOU claim may be lost and he could end up being used for what he is no longer able to do. “In my experience, when a LOU claim has been successful, most of my clients retire their horse completely,” says veterinary surgeon Colin Mitchell MRCVS of Scott Mitchell Associates.
“I see very few cases where the horse has been retired under loss of use from one discipline and has gone on to do something else.”
Colin believes that keeping a loss of use horse in work can be a welfare issue.
“If a horse is not able to do any activities because he is lame at trot, even hacking in walk could be too much for him. Owners need to be sensible when it comes to the future of a loss of use horse.”