How To Select and Buy Insurance

Ark Agency Animal Insurance Services

How To Select and Buy Insurance

1.  COMPLETING YOUR APPLICATION FOR INSURANCE:  It is best for you, the Insured, to complete your own applications for insurance.  However, if your agent is completing it for you, be sure you review it and sign it yourself.  Be sure the answers and comments are accurate and reflect very well your business activities and premises before you sign.  Change or add to any answer you do not agree with.  You know your operations best, so it is important that you take the time to know the application is accurate and what it contains.  Do not allow anyone else to sign the application for you.

2.  TRY TO INSURE ALL YOUR BUSINESS ACTIVITIES & EXPOSURES UNDER ONE POLICY, OR WITH ONE AGENT:  Get all of your equine related services (exposures) insured under one policy.  This is sometimes difficult to do for equine and recreational insurance needs.  However, it is usually possible and if you can, is often financially beneficial to you.

3.  YOUR QUOTE, BINDER AND POLICY SHOULD SPECIFICALLY LIST YOUR EXPOSURES AND ACTIVITIES:  Purchase an Equine Liability Insurance Policy that adequately covers and specifically lists all your activities in the policy.  Create a list of your equine related services and be sure they are represented in the quote and policy.  If not, question the omission with your agent or company.

4.  INSURANCE POLICIES ARE NOT ALL ALIKE – COMPARE CAREFULLY:  Insurance Policies are not all alike, and in fact can be quite different.  It is important to have the differences in insurance quotations and coverages compared prior to purchase.  A knowledgeable agent that you trust will be glad to assist you with this.  Some Insurers offer several deductibles, some only offer zero dollar deductibles and some require a dictated deductible.  Choose a policy with a deductible you can afford to pay if you have a claim.

5.  INSURE WITH AN A RATED DOMESTIC INSURANCE COMPANY:  The policy should be placed with an “A” rated domestic insurance company, one that is domiciled or has its principle business location in a U.S. state.  The Insurer should have a long standing reputation for financial soundness, and have been in the property and casualty business for twenty years or longer. It should have an excellent reputation for service, knowledge of equine, animal, livestock, farm and recreational risks, and for handling related claims.   Some of this information may be found by looking at AM Best’s most current annual P & C insurance company reviews, which can often be found at your library.  You may also gather this information by questioning your agent, by visiting the company’s web site, and by asking about the carrier’s reputation through your state’s department of insurance or office of the insurance commissioner.

6.  WE USUALLY GET WHAT WE PAY FOR:  Be wary of low pricing, as generally a low price means something important is missing in the policy or the Insurer may not understand how to price equine exposure. This may cause coverage and claims problems later on.

7.  WORK WITH A REPUATABLE, EXPERIENCED INSURANCE AGENT:  Work with an agent who has been around for a while, who is dependable about providing good service, and who can answer your questions well and accurately.

8.  SELECT YOUR PROPERTY VALUES AND LIABILITY LIMITS CAREFULLY ACCORDING TO YOUR NEEDS:

HORSES: The basis for insurance evaluation of a horse is purchase price or a multiple of the stud fee paid to produce a foal.  Insurers use established formulas to determine maximum insurable value above the base. If you want to insure your horse at a higher value, it may be established by submitting show, training fee, or breeding records to the Insurer.  An offer to purchase a horse cannot be used unless it has been accepted. Sentimental value does not count.  The Insurer has the “final say” as to how much they are willing to insure a horse for.  It is in your best interest to correctly justify horse values before you purchase insurance.  By doing this, claim processing usually proceeds more quickly and smoothly than if value justification is not on file with the Insurer.

PROPERTY: House and outbuilding values are set according to established formulas and criteria, such as building caliber, style and type, condition, improvements, rates of inflation, building replacement costs, etc.  You should consider what level of co-insurance and deductible you are comfortable with.  Be sure you know what the insured values will be and that you are in satisfied with them in advance of purchasing insurance. Doing an inventory of your personal property can help you establish a value for all of the “non-building” related property that you own, such as livestock, fencing, machinery and other equipment.  Consider whether you want to insure valuable personal items, such as jewelry, coin and stamp collections, art objects, cameras, etc. for current value.  A certificate of purchase, bill of sale, or an appraisal is usually required to establish values, which should be reviewed and updated every year or two.

LIABILITY: The Insurer will usually offer General Liability policy limits from $300,000 to $2,000,000 aggregate, and some will offer more options.  If you require higher limits, you may need to buy excess or umbrella coverage.  Your Insurer and agent cannot advise you on the liability limits you should choose.  Many factors could be considered and you should discuss those with your attorney, who is really the best person to counsel you about limits you should choose.  To follow is a list of just some of the factors to consider:  1.The litigiousness of your state and county. 2. The highest award in a civil suit tried in your county.  3. The total of your personal and business assets. 4. How your business is legally established (Single Proprietor, Partnership, Corporation type), and what protections that set-up method may provide for some of your assets. 5. The laws of your state that may provide protections for some of your assets should a claim reach a value above or outside of your policy limits. 6. A limit that is dictated to you by landlord or client contract.

9.  CAREFULLY FOLLOW THE REQUIREMENTS FOR PUTTING COVERAGE IN FORCE:  Your payment is your consideration in activating your contract of insurance, so be sure to pay the down-payment on or prior to the date you wish coverage to go into force.  If your premium is financed, make your payments on time.

10.  REVIEW YOUR PAPERWORK AND INSURANCE CONTRACTS:  After putting insurance in force, you will usually first receive proof of insurance in the form of a binder.  The binder should represent the coverages that will appear in your policy later when it arrives.  Review both documents carefully to be sure all the names, addresses, locations, exposures, limits and values are as previously quoted.  But, also this is another opportunity to make sure the policy is correct, contains what you need, and to ask about any policy wordings or exclusions you may question.  Even if you do not have time to read each page word for word, scan it for accuracy and review added endorsements and exclusions.  Contact your agent if you have any questions.

11.  KNOW WHAT TO DO IN EVENT OF CLAIM OR INCIDENT:  Most Insurers provide claim instructions and contact numbers with policies.  However, it can take a while for this information to get to you.  Meanwhile, learn how to proceed in event of a liability incident, occurrence, or claim.  Know what incidents need to be turned in and how soon.  Know how to proceed should an insured animal become ill, injured or die.  Provide claims contact information to people who need to know; such as a boarding stable where you keep your horse.  Know how to proceed in event of a theft; usually get a police report immediately and turn in notice to your Insurer immediately.  Know how to protect your property (usually buildings) in event of partial damage, while waiting for an adjuster and prior to a time when repairs can be made.  Knowing what to do in advance can help you avoid coverage issues later.  Also, it is good to keep lists of your policies and names of insurers and agents at an off-sight location.  This will make it easier and quicker to reconstruct your insurance history at a time when you need it.

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*General information is provided on this insurance topic.  Acting on our coverage recommendations does not guarantee coverage if you have a loss or claim.