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Insurance for Leased Horse?
Q:
My 18-yr old daughter passionately wants to lease a horse
owned by an individual and boarded at a commercial
stable. She is being asked to sign what appears to be a
generic contract with the lessor insurance paragraph
crossed out and initialed by the owner. However, the
owner has handwritten in that she is responsible for vet
bills if the horse in injured while she is riding him,
and specifying a $15,000 amount to be paid the owner if
the horse has to be put down. I am uneasy about her
leasing a horse without being insured. Am I justified?
(She thinks I'm making a big deal out of nothing.) If
so, what kind of coverage is suitable for the lessor?
Sincerely, Mean Old Mom
A: Of
course, I haven’t seen your proposed lease agreement,
but it does appear to assign financial responsibility to
your daughter if the horse is injured or dies while he
is in her care. (Believe
it or not, I’ve seen many lease agreements that
don’t even mention what happens if the horse goes
lame, colics, etc. during the lease term!) Because you and your daughter have some financial risk here
and the horse is worth a substantial amount of money,
you may want to consider obtaining insurance on the
horse. With
horses, as many of us know all too well, we should
expect the unexpected!
Now, what type of insurance to buy?
I’d recommend mortality insurance in an amount
that reflects the horse’s full fair market value as
well as major medical insurance that would cover colic
surgery. The horse’s owner may wish to be named as an additional
beneficiary on the policy.
For further tips on buying equine insurances, see
the “Insurance” page of the Equine
Legal Solutions website, where we have posted a
guide to shopping for equine insurance.
Finally, who should pay for the
insurance – you or the horse owner?
In partial lease situations, there is seemingly
no convention regarding who pays for insurance.
Sometimes the horse owner pays, sometimes the
lessee pays and sometimes, they split the cost.
With valuable horses, the owner often has
existing insurance on the horse and will build that
expense into the lease price.
With full leases, especially in situations where
the horse is kept on the lessee’s property, the lessee
often pays for the full cost of insurance.
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