American Equine External Injury Loss of Use (Plan B)

External Injury Loss of Use Coverage (Plan B) is an optional endorsement that adds coverage when an insured horse becomes totally and permanently unable to perform its declared use due to a qualifying accident, but the horse does not require humane destruction.

What’s Covered

Coverage applies when all of the following are true:

• The horse is injured by a visible, external, accidental, and violent means.
• The date of incident falls during the coverage period.
• You notify the insurer during the coverage period.
• A licensed veterinarian appointed by the insurer determines—during the coverage period—that, as a direct and proximate result of the injury, the horse is totally and permanently unfit for its declared use.

How Claims Are Paid

• The endorsement pays the maximum indemnity percentage of the lesser of:
  • the horse’s value on the date of incident, or
  • the limit of insurance shown on the Schedule (including any later endorsements).
• After a claim payment, the insurer has the right to take title and possession of the horse, and you must sign over any related registration papers.
• The insurer may offer to let you keep the horse by setting a residual fair market value and deducting that amount from the claim payment. If you disagree, both sides will try to resolve the difference, but the insurer may still elect to pay and take full title/possession at any time.
• You may withdraw the claim at any time and keep title and possession.

Not Covered

• Any horse used for breeding
• Any loss of use that arises directly or indirectly from cosmetic conditions of any nature

Important Conditions

• If you and the insurer disagree on whether the horse has a permanent and total loss of use, the matter goes to a mutually agreed qualified licensed veterinarian at the earlier of:
  • 3 months from the date of incident, or
  • the end of the policy period.
    That veterinarian may decide immediately or set an observation period, but must make a final decision before the policy period ends. The decision is final and binding.
• If a claim is paid under this endorsement or under the horse’s mortality coverage, all other coverages for that horse end, and the premium for that horse is fully earned.
• If the underlying mortality coverage ends (expiration, cancellation, or deletion), this loss of use coverage ends automatically unless the mortality coverage is reinstated or restored.

Practical Summary

Think of this as coverage for a horse that’s still alive, but can no longer do the job it was insured to do—because of a specific type of accident injury (visible, external, accidental, and violent). The key items are tight: the injury must occur during the policy term, you must report it during the term, and the insurer’s appointed veterinarian must confirm a total and permanent loss of use during the term. If the claim pays, expect either a transfer of the horse and papers to the insurer or a reduced payment if you keep the horse with a residual value deduction.