Equine insurance is experiencing dramatic changes when it comes to major medical coverage.

As your equine insureds begin to face higher premiums and deductibles alongside new copays and sub-limits in major medical, you’ll need to work twice as hard to keep their business—especially because equine accounts see a significant amount of turnover even during a good year.

“Our experience has been that half of the business does not renew with the carrier each year,” says Ken Rice, underwriting director at Atain, a property-casualty insurance company that is part of the Kaufman Financial Group. “That’s pretty typical in the industry.”

Although many carriers can count on new business replacing what they lose in renewals, agents might not have the same peace of mind. “It’s a commodity product for the most part,” Rice says. “The handful of competing carriers in the niche will pretty much offer same terms and conditions equally, give or take. And the cheapest price for the consumer is always attractive, assuming all else is equal.”

“There’s a lot of movement,” agrees Kandi Kline, equine mortality underwriter at American Equine Insurance Group. “Agents who have multiple markets are moving business around and looking for the current best place for their risks, which isn’t necessarily the same place as last year.”

But because every carrier’s approach to solving the loss ratio problems created by major medical has a slightly different spin, agents face a serious challenge when selling equine, Kline says. Consider the following scenario: You’re trying to decide which of two carriers offers a better value for your client. One’s premium is $100 more than the other’s for the same horse, but the carrier with the more expensive premium has a deductible that’s $125 less than the other company. What do you do?

“You can’t just sell on premium,” Kline says. “To a certain extent that’s always been the case with equine mortality and medical coverage, but even more now than ever, the agent needs to take a little time to understand the relative merits of the coverage and help their customer make an informed choice.”

“Whether it’s agents or policyholders, skills in reading and understanding the wording are put to the test, as well as math skills to determine which is the better deal under a particular claim scenario,” agrees Doug Panhorst, vice president of underwriting and administration at American Equine Insurance Group. “There are definitely some nuances to the equine coverage that a producer who’s not familiar with it may run into some trouble with.”

How can you add value to make sure you retain your equine clients? Help your clients understand this line’s coverage nuances. Here are three unique aspects of equine insurance every agent should know about:

Reporting requirements. “If a horse has medical coverage or even only mortality, it’s incumbent upon the policyholder to notify the company as quickly as possible that something is going on with the horse,” Panhorst explains. “Most horse owners do this on their own, but since the company has a vested interest through the insurance, the policy requires immediate notice.”

Full disclosure. If your insured is considering changing carriers or agencies, “everyone involved needs to be very careful if the horse has had a claimed health condition during the year or even an unclaimed health condition,” Panhorst warns. “Any carrier is going to want to know the current status of the horse and if anything has been done in the last 12, 24 or even 36 months. Oftentimes when the business is moved, that disclosure gets lost in process.”

Policy length. “An equine mortality policy is written on a 12-month term basis and needs to be renewed every year,” Kline says. “Pre-existing health conditions can be excluded from coverage and anything that happens in this policy year can be excluded in the next policy year if coverage is renewed. An application is required every year.”

If you don’t do your homework, your insureds will—and they’ll notice you don’t know your stuff. “Horse people can be kind of funny,” Kline says. “They are a lot more informed than a lot of agents might expect. A horse person going and looking for insurance may already have a lot of information. They might come armed with all of these ideas—some are true, some might not be correct. It’s a lot easier to sell equine insurance if you know a little bit about horses.”

Jacquelyn Connelly is IA senior editor.