Loss of use insurance covers the situation where a horse survives an injury or illness but is permanently unable to perform the specific function for which it was insured. It is a distinct coverage from mortality insurance — mortality pays when a horse dies, while loss of use pays when a horse lives but can no longer perform. Understanding the specific terms, limitations, and documentation requirements of loss of use coverage is essential, as this is one of the more complex and frequently disputed claim categories in equine insurance.
Loss of use coverage is typically written as a percentage of the horse's mortality value — commonly 50% to 60% of the insured value — and pays out when a veterinarian certifies that a horse is permanently unable to perform its insured use. The "insured use" is the specific function documented in the policy: a horse insured as a barrel racing horse must be unable to run the barrel pattern; a horse insured as a dressage horse must be unable to perform at the level for which it was insured. A horse that can still be ridden at a lower level — even if it can no longer compete at its previous level — may not meet the loss of use threshold.
The permanence requirement is one of the most common sources of loss of use claim disputes. Insurers require documentation that the horse's inability to perform is permanent — not seasonal, not responsive to treatment, and not likely to resolve with additional time and rehabilitation. Certifying permanence requires a veterinarian to state definitively that recovery is not expected, which is a difficult conclusion to reach with certainty in many injury situations. Owners expecting a loss of use payment often discover that their veterinarian is reluctant to certify permanence when there is any remaining possibility of recovery.
Loss of use coverage is generally more expensive relative to mortality coverage, and not all insurers offer it for all horses. Horses with pre-existing conditions that limit their use, or horses in high-injury-risk disciplines, may face restricted loss of use coverage or premium surcharges that make the coverage cost-prohibitive relative to the risk.