In the aftermath of the Australian Summer’s devastating bushfire season, it emerged that many impacted home owners were either appreciably underinsured or not insured at all.
There is a direct correlation with the thoroughbred industry. While Australia boasts exceptional prizemoney and incentive schemes for thoroughbreds that are the envy of the world, the value of mares, foals, yearlings, racehorses and stallions has never been higher.
These substantial investments that can run into millions of dollars, and allied ‘production’ costs bring heightened risk in an industry where bloodstock is vulnerable to the elements and inherent vagaries of animals racing tightly packed at high speed.
Accidents can and do happen; horses can and do get sick; complications can and do arise during foaling or in utero. Given potentially large capital losses and loss of future income, managing these risks has never been more important and needs to be factored into the cost structures of thoroughbred investments.
“Self-insurance, where a person or business chooses to bear the risk itself rather than take out insurance protection, is cost justified if a claim does not arise; crystal ball gazing! However, self-insurance is not recommended where the person or business cannot afford to incur a loss, or unable to replace the asset lost. It could eventuate that the risk exposure and ultimate cost of not insuring an asset lost is higher than if it had been insured. A wise man once said “If it’s worth owning, it’s worth insuring”.
Wayne Aldridge, Managing Director at Magic Millions Insurance
Fall Of Hammer Insurance at Yearling Sales
When buying a horse at auction sales, whether it be Magic Millions, Inglis or other, once the gavel has fallen and you are the successful bidder, the purchase is contractually yours and you are responsible for it. At fall of hammer, risks to and in the horse immediately transfer from the vendor to the buyer. Fall of Hammer insurance is the safety net upon which you can rely for incidents that trigger a claim under the policy.
“Fall of the hammer insurance is an important risk mitigating undertaking for us to protect our investment and that of our clients. Post sale we deem our yearlings to be at the highest risk as many for the first time live somewhere outside of the farm they were born and grew up on, many of these locations with far greater on-farm activity than they would be accustomed to. They also interact with new people who have facilities, systems and processes different to what our yearling may be used to”
Bruce Slade, Kestrel Thoroughbreds
Fall Of Hammer Insurance at the 2020 Capricornia Yearling Sale
Fall Of Hammer cover is available for all buyers at the 2020 Capricornia Yearling online sale to be run by bloodstockauction.com as the agent. To arrange this, we suggest contacting Magic Millions Insurance before the bidding opens. Key contact details for MM Insurance can be found on our website or at the end of this email. Once you have purchased a lot, simply call, text or email us to confirm your order with the percentage interest that you wish to insure.
The transfer of this sale to a digital platform will not affect buyer’s ability to cover their yearlings from Fall Of Hammer, noting there will be a requirement for a Declaration Of Health for yearlings insured up to $60,000 or a Veterinary Certificate for yearlings insured at $60,000 and over. We must also emphasize, that Fall Of Hammer in this instance, is synonymous with the successful bidder using an online sales platform.
Innovation in Bloodstock Insurance
Magic Millions Insurance, as part of the HQ Insurance group, are able to offer an EXCLUSIVE clause on their policies called Guaranteed Renewal. This would have to be the biggest innovation in the history of bloodstock insurance and means that in the event that your horse insured under the policy sustains a life-threatening injury, illness or disease, coverage will automatically renew at the existing sum insured until the horse reaches the age of 14 without exclusion/s being placed on the policy. Further to that, NO Veterinary Certificate will be required for any renewal until the horse reaches 14 years of age.
Life Saving Surgery Cover
This extension to the standard mortality & theft policy, covers Veterinary expenses including up to 14 days of after-care costs and transport to and from the hospital or clinic in instances where surgery under general anaesthetic is performed in an attempt to save the life of your horse. Limits of up to $10,000 and $15,000 are available, with the majority of these claims arising from colic surgery or septic joint surgery.
Do Trainers & Syndicators Insure from FOH?
Nine times out of ten the trainer or syndicator who purchases a yearling at the sales will have insurance cover in place. This is generally organized pre-sale but it can be done during the sale if circumstances arise where it’s necessary. Trainers or syndicators obviously need that protection in place as they are essentially liable to pay for that yearling before they’ve had the chance to sell shares or advertise the horse to their client base. It will then, on most occasions, become the responsibility of the individual shareholders in the horse to continue cover after the first year if they choose to do so.