What’s the difference between prices?

Photo: Jon Stroud

With so many terms to get your head around, it can be tough to make sense of insurance policies. Luckily, Claire Perry, policy administrator for KBIS, is on hand to debunk the difference between market value, sum insured and purchase price. She says…

“Let’s start with market value – this is the amount you think your horse would be worth in the current market. It’ll be the same as the purchase price if you bought him recently, but may differ if you’ve owned him for some time. This is because you may have increased his value by educating him further, or perhaps as he’s aged he may now be worth less. To decide on the market value of a horse you’ve owned for some time, the best thing to do is look at horses for sale who are of a similar age, breed, type and level of work. 

“Now, the value you insure your horse for – also called the sum insured – has to reflect his current market value, but it doesn’t always have to be exactly the same amount. Some companies allow you to slightly underinsure your horse in order to bring down the premium. It’s an option worth looking into if the main reason you’re looking to insure is for cover elements, such as vet fees and public liability. 

“It’s not possible to insure your horse for more than you bought him for if he’s a recent purchase. This is because insurance is there to prevent financial loss, so you aren’t able to get back more than you spent. If, six months down the line, he’s improved and developed, and feel he would be worth more than you paid, you can increase his value on the insurance policy to reflect this.”

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Bear in mind that increasing your horse’s value through your insurance will also raise your premiums.