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Permanent Loss of Use

Permanent Loss of Use

 What is Permanent Loss of Use cover?

Permanent Loss of Use means that the horse will never again be able to perform the activity for which it was insured. For instance if a horse is injured and as a result of this injury will be unable to compete at the level to which it did before the injury then this would be Permanent Loss of Use.

You can choose either 75% or 100% when selecting cover for Permanent Loss of Use and this is the maximum amount of the horse's current market value you would receive back if a Permanent Loss of Use claim is agreed.

When taking out Permanent Loss of Use cover you will be asked to specify the main activity which your horse will be used for; it is this activity that the vet and insurance company will use to judge whether the injury or illness sustained is a Loss of Use claim.

Permanent Loss of Use claims can be very lengthy and the underwriters have to be satisfied that all avenues of treatment have been pursued before they will consider a claim under the Loss of Use section.

 Are there different types of Permanent Loss of Use?

There are two different types of Permanent Loss of Use

1. Permanent Loss of Use due to an accident, illness or disease.

2. Permanent Loss of Use due to an accidental external injury only.

The second option is generally not taken out that frequently as although it will result in a lower premium it provides much more limited cover.

You can then choose whether you would like to take out 100% Permanent Loss of Use for the sum insured or 75% Permanent Loss of Use for the sum insured. The second option again will mean that your premium will be lower but you still have some cover in place.

 What benefit will I receive from a Loss of Use claim?

In the event of a claim you will usually be presented with two options:

1. Keep the horse in retirement and receive a lesser payment

2. Have the horse put down and receive the full amount as per your policy

If you choose to keep your horse in retirement you will receive a residual value. This value will vary according to each individual circumstance, but will normally be subject to a minimum of 10% of the sum insured.

KBIS will also require that the horse or pony is freeze-branded to indicate that it has been the subject of a Loss of Use claim, the cost of which is covered by KBIS.

 Does Permanent Loss of Use cover unsuitability?

Loss of Use cover will not cover you for lack of ability or potential ability, loss of value, blemishes, behavioural problems or temporary incapacity.

 Does Permanent Loss of Use increase my premium?

Having Permanent Loss of Use will increase your premium, but it does provide an increase in cover. Some people choose to take Loss of Use cover out on a new horse as a means of 'warranty', protecting yourself against the unknown. Once you know the horse and its history and capability you may then choose to remove or keep the Loss of Use cover in place.

You can limit the increase in premium by choosing to take out cover for 75% Permanent Loss of Use of the sum insured, whilst paying your premium by monthly direct debits may also help to spread the cost of your premium.

Insurance companies will normally require a 5-stage vetting and depending on the horse's value, specific x-rays as well, so you need to consider this expense in addition to the increased premium.