Loss of Use coverage is an endorsement that can be purchased so that a claim payment may be triggered and paid to you in the event that your horse’s value is depreciated by accident or illness that leaves them unable to perform their intended use. The included causes of loss of use are fairly broad, but beware that your policy may have some exclusions in place that limit the circumstances that will trigger a claim payment.
Most policies will pay up to 50% of the horse’s insured limit if a Loss of Use occurs. If your horse dies, its value is depleted to $0 and as such the equine mortality coverage pays you the policy limit. However, in a circumstance of Loss of Use, your horse likely retains some value and so the coverage is intended to bridge the gap between the value it had prior to the loss and its currently depreciated value.
For instance, imagine a mare that is used for showing or jumping sustains a serious leg injury and may not be sound for the show ring or strenuous athletic activity any longer. The injury does not change her past show record or her genetic potential and she may still be quite sound for use as a broodmare. Her market value has undoubtedly been degraded as a result of the injury but it has not been reduced to zero.
Before you buy this endorsement in conjunction with your mortality coverage, it is important to understand how these types of claim payments are made! Horse owners wishing to purchase a Full Loss of Use endorsement should expect the coverage to approximately double their base mortality premium. Like Mortality coverage, Loss of Use premiums are based upon a percentage of the insured value of the horse.