Establishing a Horse's Value for Insurance

Establishing a Horse's Value for Insurance

Does the insurance company agree that your horse is worth what you think he’s worth?

dun reining horse saddled in wash rack (Credit: AQHA)

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The American Quarter Horse Journal

By Katie Navarra 

To insure or not to insure? That is the question.

Experts say the decision to insure your show horse boils down to two factors – your long-term goals and the level of risk you’re willing to accept.

Not enough insurance for a valuable stallion or top-level show horse can keep you awake worrying about infertility or a career-ending injury. On the flip side, you can purchase so much insurance that you’re spending more than what is necessary.

Should your horse be insured?

To help clients determine whether or not insurance is needed, Pat Mullins, Markel Insurance Company’s director of association management, asks, “If something happens to the horse, do you want to replace it?”

Assuming the client’s answer is “Yes,” he next asks whether or not the individual has enough money to replace the horse without the financial assistance of an insurance claim.

“I had one gentleman tell me that he was good for the first $100,000, but would need help after that,” Pat says.

That’s an extreme example. Chances are, the vast majority of horse owners don’t have $100,000 stashed away to buy a new horse. While your threshold is likely far less than six figures, it is worth considering the dollar amount you would need to replace an injured or deceased horse.

“We insure a good number of horses worth $5,000, $7,500 and $10,000,” Pat says. “Often people who are buying their first horse want to have insurance in case anything happens to the animal.”

Once you determine insurance is a good option, it’s time to decide your horse’s worth. Emotions can influence an owner’s opinion of his horse’s value and can occasionally skew the perceived value. Pat offers tips for establishing a fair and accurate value so that when you purchase a policy, you’re prepared with an accurate valuation.

Determining the Value of a Horse

Several factors are used to establish a horse’s value: the animal’s bloodlines, conformation, training, offspring and competition records are all part of the equation.

“We start the process by asking what the client thinks the horse is worth,” Pat says.

Equine insurance agents are knowledgeable about current trends in the horse market and have access to sale records so they can help an owner accurately value a horse when the policy is written.

“We won’t write a policy for more than a horse is worth, though sometimes the policy can be written for less than the horse is worth,” he says.

For example, a horse with a value of $10,000 can technically be covered for $5,000. However, there are some minimum value requirements in order to be eligible for applied coverage.

“There are a variety of options that you can discuss with your agent on protecting your investment,” says Karen Shedlauskas, horse insurance specialist for Markel.

A recently purchased horse is the easiest to value. It’s cut-and-dry when a proven horse sells for $30,000. That horse’s show record or performance in the breeding shed speaks for itself – and the purchase price reflects those accomplishments.

The purchase price for horses sold through the performance industry’s largest sales are public record. An insurance company can readily search the sale records and confirm the price paid. A horse sold via private treaty should be accompanied by a bill of sale, which serves as the documentation for an initial value.

“Sales records, show records, vet exams and declarations of health are all good documents to start with in looking at the value of a horse,” Karen says.

The valuation process becomes less straightforward for yearlings or unproven prospects. Say that the purchase price is $5,000. That is the value for which the horse is first insured. Over time, though, let’s say $2,500 is spent in training fees. Then the horse goes to the show ring and establishes a modest show record. It would be reasonable to assert the horse is now worth $7,500, and likely more. Then what happens to the horse’s worth if it’s bred?

Receipts for training fees, stud fees and show records serve as proof of increased value. For some horses, these changes occur over a period of time. While most often a horse’s worth increases gradually, the value of some individuals could, in fact, skyrocket overnight.

“Sometimes a horse wins a futurity or derby and his value drastically changes in 24 hours,” Pat says.

Appraising Horses

Regardless of how long it takes for a horse’s value to increase, it’s the horse owner’s responsibility to notify the insurance company when a policy needs to be adjusted, up or down.

“It’s up to the insured to call and request an increase,” Pat advises. “We can do that at any point during the year as long as the increase is warranted.”

In addition to a bill of sale, training receipts and show records, current market trends can also be used as an indicator of your horse’s worth. The sale price of horses with similar breeding, age, training and showing experience can provide comparable valuations.

It’s important to remember that these are only estimates. A brother and sister from the same bloodline, but foaled one year apart can significantly vary in worth. The siblings will mature at different rates depending on their individual conformation, soundness, temperament, training and, in later years, whether they are bred or not. Value can also change if a horse is gelded or a mare is barren, assuming they are of breeding quality.

Establishing a value for your horse can become an emotional process. If you’ve bred, raised and trained the horse yourself, you may be inclined to think the horse is worth more than he may actually be. 

Ultimately, the “burden of proof” remains with the individual purchasing the policy. It’s beneficial to save receipts, bills of sale, stud fee advertisements, training receipts, and show and breeding records so that the information is readily available if requested.

Equine Insurance Policy 4-1-1

Unsure of what type of policy is right for your horse? There are several to choose from.

Annual premiums are based on a percentage of your horse’s estimated value and can differ from one company to the next. The percentage is determined by your horse’s age and discipline.

There are many different types of exclusions in insurance policies and it is always a good idea to review your policy with your agent to go over those exclusions.

“If there are pre-existing conditions for a horse, most policies will have exclusions for those pre-existing conditions; however, it is always good to communicate with your agent to make sure you understand the coverages provided under any insurance policy,” says Karen Shedlauskas, horse insurance specialist for Markel.


Insurance companies require that you purchase a mortality/theft policy before any additional coverage can be purchased. While the annual premium is based on a percentage of your horse’s estimated value, insurance companies have established minimum policy prices. Many companies now offer some colic coverage as part of the mortality/theft policy.


Major medical coverage can be purchased as an addendum to a mortality/theft policy.

Once your horse is insured, you are required to provide any care necessary to save the horse.

If your horse suffers colic and is a good candidate for surgery, and you opt not to put the horse through the stress of surgery and choose to euthanize, the company is not obligated to pay on the policy unless it has agreed to euthanasia. If putting the horse down is thought to be the most humane option, the owner or the veterinarian should contact the insurance provider immediately. If all means are taken to save the horse and the horse does not make it, then you will be paid on the policy.

Infertility or Accident, Sickness, Disease (ASD)

Infertility or accident, sickness and disease policies are reserved for breeding stallions. A stallion’s estimated value is determined based on his stud fee and the number of mares he settles over a given period of time. If he becomes infertile, you’re insuring against the loss. A broodmare’s value as a producer would also need to be determined based on the value of her foals. However, such policies are expensive. Some insurance companies call this type of policy “infertility” insurance, others call it ASD.

Markel: Offering Insurance Protection and Peace of Mind

As a member of AQHA, you’re among horse enthusiasts who want only the best for you and your horse. At Markel, we focus on protecting your equestrian lifestyle, including your horses, home, barn, tack, and equipment. Whether you have one horse or an entire stable, keep horses for pleasure or business, Markel can fully protect you. Click here to start an online insurance quote today!

Additionally, AQHA members are eligible for a 10% association credit applicable to a commercial equine liability policy, or towards the liability premium of a farm package policy. Learn more at