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Insuring Thoroughbreds: Protecting a Triple Crown Prospect

Insurance protects all kinds of things, and for racehorse owners, equine insurance is very important. Horses and humans go way back. Humans domesticated them prior to 3000 B.C., probably somewhere in central Asia (, and horses have been loyal companions ever since. These days, horses can be major investments with the potential to make big bucks for their owners.

Horse racing and breeding took a hit in the recession as prices for racing horses spiraled downward. Granted, horses are not one of the more common consumer commodities, but nonetheless, the drop in prices affected the livelihoods of many people, including owners, trainers, and jockeys. But prices for racehorses have rebounded in recent years. According to, the average price for a racehorse was a little over $112,000 in 2006. By 2009, that figure fell to about $60,700. In 2013, the average price climbed back up to $87,300.

The Making of a Champion

The cost of creating a prize-winning horse goes far beyond the cost of buying it. Think it costs a lot to raise a teenager?  Consider the expenses of a thoroughbred, after purchase. How does more than $30,000 a month sound? It’s no wonder equine insurance is a necessity for thoroughbred owners.

Some costs of owning a thoroughbred include:

  • Veterinary bills – According to Gayle Van Leer, a leading authority on equine training, sales, and farm management, a horse in training will likely have at least $300 each month in vet fees, and if the horse is ill or injured, those fees will likely exceed $1,000 a month.
  • Trainers’ salaries – Pay rates for trainers vary greatly according to experience and achievement. Many experienced trainers take a cut of what the horse earns at each race.
  • Farriers – Horses need new shoes more often than human toddlers, or about once a month, with a price tag of at least $150 each time.
  • Jockey fees – Jockeys’ fees are often in the range of 1/10 of the winnings.
  • Transportation – Horses are not willing travelers so keeping them happy during a journey is expensive.
  • High-quality feed
  • Maintenance costs such as stables, gear, and equipment

The Rule of Threes

Regardless of recession or economic growth, horse racing continues. The pinnacle of the sport is the Triple Crown. The Triple Crown, officially called “The Triple Crown of Thoroughbred Racing,” is a competition for 3-year-old horses, and the title can only be won by a horse that wins the Belmont Stakes, the Kentucky Derby, and the Preakness Stakes. Triple Crown winners are fairly rare. The 1970s saw the last three Triple Crown winners: Secretariat, Seattle Slew, and Affirmed.

This year, the final Triple Crown race, the Belmont Stakes, is on Saturday, June 7.  California Chrome, the only potential Triple Crown winner, came out of nowhere, with what some view as rather unpromising parentage, although he actually shares bloodlines with two Triple Crown winners, Secretariat and Seattle Slew.

Equine Insurance Policies

There are several types of equine insurance, each covering a specific event or type of loss. Policy costs vary with the value of the animal, how the horse is employed, and the type of coverage sought.  
Horse racing insurance coverage recommended by the Thoroughbred owners and Breeders Association includes:

  • Full Mortality insurance, which covers loss of a horse due to death, much like life insurance for humans. While it does not cover injuries, it does provide coverage if a horse must be put down due to injury. Before granting a full mortality policy, insurers require a complete veterinary examination. Additionally, in the event a horse dies, most insurers require a post-mortem examination.
  • Fire, lightning, and transportation coverage is specific to a horse dying in a fire, from lightning strikes, or during transportation. The coverage is limited and thus costs less than full mortality policies.
  • General liability insurance is a necessity for any racehorse owner or stables.  Thoroughbreds are known for their high-strung personalities and for “spooking” easily.
  • Workman’s Compensation may be required to cover situations where employees are injured, such as a jockey thrown from a horse.
  • Owners of large stable operations with multiple horses may be able to obtain claiming insurance, a highly specialized product that extends insurance coverage to very recently acquired horses.  

Gayle Van Leer, a horse training and sales expert, recommends:

  • Care, custody or control (CCC) insurance to protect an individual if someone else’s horse dies in their care.
  • Loss of use insurance to cover things such as an injury preventing racing or breeding issues in the future.
  • Major medical/surgical insurance.

The Big Payoff

For those familiar with horse racing, insurance for these types of coverage does not seem unreasonable, especially when compared to the potential payout on a winning horse. For instance, according to USA Today, California Chrome brought in $900,000 for his Preakness win and $1.4 million for winning the Kentucky Derby. His owners state the horse is now worth in excess of $30 million.

Race purses are nothing to sneer at, but sometimes the biggest payoff comes with letting the horse relax and have a little fun on his own. Stud fees for winning horses easily run into the tens of thousands of dollars. At that point, the horse is like a high-quality annuity: He just keeps paying back on an investment year after year after year.

Insurance Is Protection

Racehorses are beautiful creatures, but they are also investments that require coddling, protection, and admiration. Their owners owe it to themselves to protect their investments through equine insurance. While the cost of coverage increases with the worth of the horse, considering the many injuries and accidents that befall thoroughbreds, it makes sense to purchase sufficient coverage so that a major capital output is not squandered when a horse is injured and/or must be put down.

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