Horse owners in Florida can’t rely on location to shield them from exposure - or insurance scrutiny. “The majority of horse owners in Florida are going to evacuate if they know that they are in the path of a named storm,” said Waverly Ernst (pictured), practice leader, equine, farm and ranch insurance at Marsh McLennan Agency. But while horse owners may be well-drilled in hurricane response, their insurers are shifting how they assess property risk - tightening access to coverage and pushing premiums upward.
Equine mortality coverage has remained relatively stable, Ernst said. But property and casualty lines are seeing hard market conditions accelerate, particularly in high-risk zones. “The industry is very tight on the market, just like on the personal line side,” she said. “They're very particular about the building construction and the updates that have been made to the properties.”
Carriers are declining risks for properties with wood-frame construction or roofs over 15 years old, and owners with less resilient infrastructure are being priced out. “The premiums are always much higher in the coastal and the wildfire areas than they are the rest of the country,” Ernst said. Those price hikes are already impacting horse facilities along hurricane corridors and in fire-prone states like California.
On the mortality side, the major stressor has been rising veterinary costs and the response by carriers to curb payouts. "Major Medical is probably the coverage we are seeing the most restrictions in," said Ernst. "The medical coverages are an endorsement on the mortality policy... and within the major medical, there's sublimits for certain treatments."
These limitations have become more common - and more complex. Ulcers, lameness and diagnostic procedures are increasingly subject to sublimits, even within broader coverage caps. On top of that, policies often carry high deductibles or co-pays. “Some carriers have a large deductible per medical claim or a copay associated with it,” she said. “That way, the client is carrying some of the costs as well.”
Critically, policyholders may still be required to pursue expensive treatments even if they don’t carry medical coverage. “Even if you don’t carry medical coverage and your horse colics, there is a clause in the mortality policy requiring you to make all reasonable lifesaving efforts possible. Should the horse be a candidate for colic surgery there is a small amount of coverage for emergency colic surgery included in most mortality policies,” Ernst said. These clauses can place serious financial pressure on owners during time-sensitive decisions.
While geography doesn’t drive mortality rates, discipline and age certainly do. “Horses that are in a higher-risk discipline, such as racing and eventing, their rates are going to be higher than the hunter jumper, the dressage, and the Western disciplines,” Ernst said. Younger foals and horses over 14 also command higher rates due to greater health risks.
For property and casualty, however, location continues to dictate access. “We are seeing the carrier appetite tighten as far as the location goes,” she said, "Within some Florida, California and other wildfire prone locations, horse farms are facing limited markets - or no coverage at all."
Drug cost fluctuations, though increasingly relevant to the vet industry, haven’t affected equine insurance in the same way.“It does not [impact] because it’s relevant only to the treatment and the policy limits… preventative and necessary daily medications for horses are not covered under the medical endorsements.” Ernst said.
Ernst predicted that underwriters will continue to sharpen exclusions based on patterns in claims data. “As more research is done on the loss leaders, such as kissing spine and other career-ending injuries, there will be likely further coverage limitations and exclusions,” she said.
Emerging tech, such as wearable monitors, may give owners more tools to catch problems earlier, which could help reduce claims costs over time. But insurers will also be using this data to refine pricing and reduce exposure.
“The sooner you notice it and the easier it is to treat... the better recovery time the horse generally has,” Ernst said. That means real-time health data could benefit both sides of the table - provided owners know how to use it.
But technology alone won’t be enough to offset the need for stronger underwriting literacy. “It’s imperative that the equine underwriters really understand how to read these reports that come in from the veterinarian, such as pre-purchase exams,” she said. That expertise will be critical in avoiding bad risk and enforcing tighter policy terms across a high-cost, high-sentiment segment.
