Loaner unfortunately lost horse but now in tricky situation...

[Andi_]

I read through this whole thread (broken leg.. not much else to do! lol) and I find myself very on the fence.. I can see arguments for both sides.

On one hand, IF the insurance company does indeed pay out to people loaning a horse (or leasing as we would say here), then OP has the legal right to the payout as she paid the premiums. Even more so if the horse's owner did actually sign a document stating that the lessee was entitled to any payout should the horse die. I also do not think that the owner should necessarily get the money since they had not insured the horse in the first place and are benefitting from the lessee paying for insurance. And she DEFINITELY is wrong to go back on her word, if that is the case.

On the other hand... I can see why many would feel the OP morally obligated to pay the owner what the horse was worth in some way, as she did not own the horse and should not be remunerated for something to which she had no ownership. It would make sense to me that, as the horse was not hers and was expected to be returned to the owner, that she should be compensated for the loss of that asset.

I don't know what is right or what is wrong.. I think there is a huge grey area and it could go either way. All I know is, before entering any type of loan/lease, proper documentation is absolutely necessary, and both parties made a huge mistake on that front. It should have been clear from the get go. If I were to lease a horse, I would have it in writing IF the horse were to be insured, who would receive the money. If I owned the horse, I would want to get the money back... but that being said, if I made the mistake of not getting that in writing or insuring the horse myself... I guess it's a hard lesson learned.

If I were in the OP's position, what I would probably do is take the payout (assuming I were actually legally entitled to it) and then pay the owner whatever the horse's worth was at the beginning of the 5 years... if it had been a $5000 then and I had improved it to be a $10,000 horse, then maybe I'd get a little something out of it to chuck in the bank and save for a future horse... however if the horse has lost value, then I'd probably walk away exactly where I started when I first started leasing, and I'd look for a new loan horse!

 

[MerrySherryRider]

Gosh, 28 pages of discussion. Answer is pretty straight forward though.
Loaner insured the horse and therefore gets the insurance pay out.
Owner choose not to insure, therefore does not get a pay out.

 

[EstherYoung]

The OP said that the letter gave permission for the pay out to "go to" them (ie as a name on the cheque, in the first instance, as a vehicle to get the pay out paid). Not that the owner gave them permission to keep the money. With emotions running high it is easy for both parties to miscommunicate, which I think is what has happened on both sides.

I know the thread has gone a bit off track, but I do feel for both parties here as they have both lost a horse that they clearly cared about.

Nb We loaned Spud for the first couple of years before we bought him. His old owner cared deeply for him, and although she deliberately didn't interfere when we loaned him, I know that even now, ten years on, she would be devastated if anything happened to him.

 

[_jac_]

Sad situation I loan a pony for my daughter, in our contract it states we must have insurance for vet fees, but I also insure her for what she is worth.

In the unimaginable event that we lost her I would pay that sum to her owner, anything else seems morally wrong to me.

 

[risky business]

Find it as typical as you like Elsicat. I wouldn't loan a horse out again particularly after reading this thread, I wouldn't have liveries again after reading a lot of threads on here (and from my own experiences). The more I read on here, the more convinced I am that its best to keep yourself to yourself in the horse world and not get too involved with other people as they often are a huge let down. This whole thread has left me feeling quite down.

Next you will be saying you don't want to leave the house after watching the news and seeing all the terrible things that go on.

Come on now there's good and bad with every situation you just have to use your common sense and make sure you cover yourself when things like this occur.

 

[teabiscuit]

Elsicat whether I loan mine out or not is my business, as are my reasons

 

[redmone]

I'm another who does not see this a complicated predicament.

OP took out insurance for loss of value of horse - payout goes to her.

OP "owes" horse owner the value of their lost "asset" (that's WHY she took insurance out in the first place!)

OP therefore receives payout to compensate owner for their lost property - and passes this on to the owner who now no longer has a horse to sell or loan out again. There should be no profiting in the case of the OP - that's not how insurance works. Insurance is there to compensate for the unexpected - not a savings plan.

Therefore if I was the owner (scrap of paper agreement or not) I would be presenting OP with a bill equal to the value of the horse. If OP was not forthcoming, I would firstly contact insurers directly to question this, and secondly pursue through small claims court.

The only grey area to me is the value of the horse (did it depreciate or appreciate in value during it's stay with OP) but as an insured value would have been decided with the insurance company, I would deem that to be the value.

I can imagine this thread alone has put a few people off loaning. But it's like all financial transactions - contracts are king. Everything needs to be nailed down very very tightly when money is involved. Don't be put off people - just cross your "T"s and dot your "I"s and try to keep a little faith in humanity!

Morals and ethics go out the window when you work in the financial world - that's why solicitors are so rich!!

RIP horsey, and I'm sorry to have spoken rather clinically about you. x

 

[cptrayes]

I am intrigued how many people believe that insurance is solely to compensate for the loss of an asset.

It's not.

It's very often to provide the money to obtain a replacement. The proof of that is that many insurance companies will insist that they provide you with replacements for your stolen items, they do not just pay out for jewellery, for example.

In this case, the loanee needs a replacement, the loanee insured to obtain a replacement, the loanee paid the premiums and the loan provider agreed to that

Where is the moral problem here that people are so outraged about?

The only immorality here is the loan provider going back on their word.

 

[Patterdale]

Yes there is. The loaner now has no horse. A permanent loan of a BE80 horse will be very difficult to come by.

Yes, that will be hard to come by. But so is an Olympic horse - doesn't mean that the rider of an Olympic horse would get the insurance money to replace it, the owner would!!.

Totally agree khalswitz!
OP has not 'lost' a horse in legal terms - as she never HAD one.

I am pretty certain that the rider of an Olympic horse could find an insurance company willing to insure for the replacement value of the horse were it to die in competition, even though they do not own the horse.

Erm, you might be searching a while.
Having owned a top eventer for a rider, and with many friends who both own and compete at the top, I can tell you categorically that this does not happen.

And aside from that, you can only insure something once. Be it car, horse, whatever. So even if the rider WERE to insure the horse - the owner would then be unable to.

 

[cptrayes]

Erm, you might be searching a while.
Having owned a top eventer for a rider, and with many friends who both own and compete at the top, I can tell you categorically that this does not happen.

And aside from that, you can only insure something once. Be it car, horse, whatever. So even if the rider WERE to insure the horse - the owner would then be unable to.

Who has ever tried? I can't see a niche insurers turning down the premiums on a multi million pound horse if asked, but I'll bet no one ever has, precisely because of your second point.

To which my reply again is THE OWNER AGREED TO THE ARRANGEMENT.

 

[cptrayes]

Totally agree khalswitz!
OP has not 'lost' a horse in legal terms - as she never HAD one.
.

She has lost the use of a horse, and if that horse was a permanent loan, the value of that horse to her is the amount of money she is going to have to pay to replace it.

She wisely insured for that, got the owner to agree to that in writing, and for her foresight is now being called immoral by good old HHO. There's yet another sensible and honest poster who'll probably never come near the forum again

 

[Cowpony]

I'm not surprised the op hasnt bothered coming back with folk possibly insinuating the horses death may have happened for gain. Making jips about what make up or products she spends her money on and questioning her lying over the agreement the owner gave.. Big surprise.

The owner chose to loan the horse, op clearly looked after and cared well for the horse or they wouldn't of had him for 5 years. Owners didn't take an insurance policy out, loaners did and paid premiums for it.. Owner agreed they didn't want the money from said insurance. So why is op the evil party, the money had clearly been discussed before and owner said they could keep it.

I've just re-read one of my posts and realise that it may well have come across as suggesting the OP might have been lying about the agreement. This wasn't my intention at all and OP, I am sorry for my clumsy wording and the upset this must have caused. What I meant was that maybe the owner and the loaner interpreted the letter differently, and therefore there has been a mis-communication about what both parties intended. My earlier post is a perfect example of how words can be meant one way but read another!

 

[khalswitz]

She has lost the use of a horse, and if that horse was a permanent loan, the value of that horse to her is the amount of money she is going to have to pay to replace it.

She wisely insured for that, got the owner to agree to that in writing, and for her foresight is now being called immoral by good old HHO. There's yet another sensible and honest poster who'll probably never come near the forum again

Yes, she had use of, but she had no financial claim over. Replacing a loan horse with a loan horse costs nothing, so why would the insurance pay out? Buying a new one isn't replacing like for like as she didn't buy the first horse. Like my car for instance - my mother owns it, but I insure it and run it. There's no hire fee etc, but it doesn't belong to me, so in the event of a write off the replacement money can't go to me, even though it's me who will no longer have use of a car, the insurance company seems it loss of owners property not my lose of use of a car, despite me paying the premiums!

I will agree in this instance the owner has signed her rights away it seems, but I would watch out for the insurance company wriggling out of this one if she claims she has to replace a loan animal not belonging to her... She has use of, but doesn't own...

 

[Tiddlypom]

I've posted previously on this thread re my experiences of insuring the elderly mare that I have on loan, including having a very detailed loan agreement. I did not get embroiled in the details of the OP.

However, assuming that the OP indeed has a signed letter allowing her to keep the payout (and it would be interesting to know the exact wording of this letter), then the owner has indeed signed away her entitlement to the money. She may now be regretting doing that.

All the ifs and buts and shoulds mean nothing if that has happened, so OP is perfectly entitled to keep all of the payout.

A loan agreement can include or exclude any number of things, but as long as both parties agree to and sign the agreement, then the conditions within it should stand. There was no formal loan agreement in this case, but the letter (was it signed before or after the death of the horse, we don't know) seems binding re the allocation of the payout.

The OP, IMHO, has brought upon herself some of the criticism that she has attracted. She appears to whinge about having to return the tack to the owner (why mention that the saddle is worth £900 and has just been altered) and accuses the owner of embarking on a money making exercise. Had she stopped before making those comments, I think that people would have had a lot more sympathy for her.

ETA There is a lot of confusion whether the OP can legally keep the payout as she did not own the horse. Yes she can. I get the payout if my loan mare dies from an accident. My loan agreement states that I then reimburse the owner. I would not dream of keeping the payout, but had the agreement been worded differently, then I would be entitled to keep it.

Reiterate yet again, get a robust loan agreement in place from the off!

www.bhs.org.uk/~/media/BHS/Files/Word Documents/British Horse Society Sample Loan Agreement.ashx

 

[Lynsey&Smartie]

The only reason that there is any payout at all is because the loaner paid the insurance premiums. If she had not done so there would be no payout for the owner to attempt to claim.

The payment is a return on the premiums paid for the insurance product purchased and therefore belongs to the person who paid the premiums. If the owner wanted to insure the horse for death she should have done so and paid the premiums herself leaving the loaner to pay for insurance for vets fees etc.

 

[MerrySherryRider]

FGS. The loaner gets the money from the insurance.

Those who say otherwise can witter on endlessly, but there is no debate on the outcome.

 

[Arizahn]

I've posted previously on this thread re my experiences of insuring the elderly mare that I have on loan, including having a very detailed loan agreement. I did not get embroiled in the details of the OP.

However, assuming that the OP indeed has a signed letter allowing her to keep the payout (and it would be interesting to know the exact wording of this letter), then the owner has indeed signed away her entitlement to the money. She may now be regretting doing that.

All the ifs and buts and shoulds mean nothing if that has happened, so OP is perfectly entitled to keep all of the payout.

A loan agreement can include or exclude any number of things, but as long as both parties agree to and sign the agreement, then the conditions within it should stand. There was no formal loan agreement in this case, but the letter (was it signed before or after the death of the horse, we don't know) seems binding re the allocation of the payout.

The OP, IMHO, has brought upon herself some of the criticism that she has attracted. She appears to whinge about having to return the tack to the owner (why mention that the saddle is worth £900 and has just been altered) and accuses the owner of embarking on a money making exercise. Had she stopped before making those comments, I think that people would have had a lot more sympathy for her.

ETA There is a lot of confusion whether the OP can legally keep the payout as she did not own the horse. Yes she can. I get the payout if my loan mare dies from an accident. My loan agreement states that I then reimburse the owner. I would not dream of keeping the payout, but had the agreement been worded differently, then I would be entitled to keep it.

Reiterate yet again, get a robust loan agreement in place from the off!

www.bhs.org.uk/~/media/BHS/Files/Word Documents/British Horse Society Sample Loan Agreement.ashx

I read through this whole thread (broken leg.. not much else to do! lol) and I find myself very on the fence.. I can see arguments for both sides.

On one hand, IF the insurance company does indeed pay out to people loaning a horse (or leasing as we would say here), then OP has the legal right to the payout as she paid the premiums. Even more so if the horse's owner did actually sign a document stating that the lessee was entitled to any payout should the horse die. I also do not think that the owner should necessarily get the money since they had not insured the horse in the first place and are benefitting from the lessee paying for insurance. And she DEFINITELY is wrong to go back on her word, if that is the case.

On the other hand... I can see why many would feel the OP morally obligated to pay the owner what the horse was worth in some way, as she did not own the horse and should not be remunerated for something to which she had no ownership. It would make sense to me that, as the horse was not hers and was expected to be returned to the owner, that she should be compensated for the loss of that asset.

I don't know what is right or what is wrong.. I think there is a huge grey area and it could go either way. All I know is, before entering any type of loan/lease, proper documentation is absolutely necessary, and both parties made a huge mistake on that front. It should have been clear from the get go. If I were to lease a horse, I would have it in writing IF the horse were to be insured, who would receive the money. If I owned the horse, I would want to get the money back... but that being said, if I made the mistake of not getting that in writing or insuring the horse myself... I guess it's a hard lesson learned.

If I were in the OP's position, what I would probably do is take the payout (assuming I were actually legally entitled to it) and then pay the owner whatever the horse's worth was at the beginning of the 5 years... if it had been a $5000 then and I had improved it to be a $10,000 horse, then maybe I'd get a little something out of it to chuck in the bank and save for a future horse... however if the horse has lost value, then I'd probably walk away exactly where I started when I first started leasing, and I'd look for a new loan horse!

I'm another who does not see this a complicated predicament.

OP took out insurance for loss of value of horse - payout goes to her.

OP "owes" horse owner the value of their lost "asset" (that's WHY she took insurance out in the first place!)

OP therefore receives payout to compensate owner for their lost property - and passes this on to the owner who now no longer has a horse to sell or loan out again. There should be no profiting in the case of the OP - that's not how insurance works. Insurance is there to compensate for the unexpected - not a savings plan.

Therefore if I was the owner (scrap of paper agreement or not) I would be presenting OP with a bill equal to the value of the horse. If OP was not forthcoming, I would firstly contact insurers directly to question this, and secondly pursue through small claims court.

The only grey area to me is the value of the horse (did it depreciate or appreciate in value during it's stay with OP) but as an insured value would have been decided with the insurance company, I would deem that to be the value.

I can imagine this thread alone has put a few people off loaning. But it's like all financial transactions - contracts are king. Everything needs to be nailed down very very tightly when money is involved. Don't be put off people - just cross your "T"s and dot your "I"s and try to keep a little faith in humanity!

Morals and ethics go out the window when you work in the financial world - that's why solicitors are so rich!!

RIP horsey, and I'm sorry to have spoken rather clinically about you. x

These sum up my thoughts on the matter. Tragic thing to happen for all involved, and I hope the parties affected reach an amicable resolution soon.

 

[ihatework]

OP I'm sorry you have lost your horse. OK you may not have had ownership, but the horse will have been a part of your life for 5 years and I'm sure it feels as though they were yours.

I have no doubt OP entered into the insurance policy with every intention it was correct and as agreed with owner.

I am however flabbergasted that they actually managed to get insurance with a payout direct to them. I have been involved in both loaning out and at having loaned horses - and in every single case the insurers (of which there have been 3 different companies) have all insisted that the owner and loaner are named in the policy and that death payout goes to the owner.
That said the fact the horse is on loan has always been declared up front. If this wasn't declared the insurers would be none the wiser and I suppose any payout is between loaner and owner.

OP I appreciate you have paid the premiums, but to be fair the bulk % of premiums is for vets fee cover. I'd say go 50/50 on the payout with owner and be done with it. Is it really worth the extra grief when in fact you may end up worse off?

 

[Wagtail]

Lets look at this slightly differently. What if the horse got ill and was PTS? In most cases, when a horse is ill or lame and PTS it does not meet the BEVA guidelines and therefore does not qualify for an insurance payout. For example, a horse with repeated attacks of laminitis, but no bone rotation, or navicular or arthritis where its destruction does not meet the guidelines. Would the owner be asking the loaner to pay for half the value of the horse?

 

[hairycob]

The thing is we don't know what the loan agreement said & we don't know what the letter said - only the OPs interpretation of it.
The insurance may or may not have been a requirement of the contract. We just don't know.
The owner may have been talking about the admin of the claim as in - you collect the money & then pay me the value of the horse. We just don't know.
The letter re insurance may have been referring specifically to Vet fee cover, disposal costs etc. We just don't know.
We only have one side of the story. If we heard the owners side we may come to a completely different view.
I just know that if I was the OP I couldn't live with myself if I banked the money for the loss of a horse that someone had kindly lent to me. Having been in the situation where a horse I had on loan died (we had only had it 3 months, had arranged for it to go back as unsuitable & it fell ill a couple of days before return - most likely due to something that had happened before we took it on.) I felt mortified. It was owners choice to pts on welfare grounds, vet had been called out immediately, nothing else I could have done but I felt so bad. To have held on to any insurance payout - no couldn't have done it.

 

[Wagtail]

Why are so many people questioning that an insurance company would pay out to someone who does not own the horse? Insurers pay out to the POLICY OWNER not the horse owner. I could take out life insurance on anyone of you for example. I do not have to be related to you or be a financial dependant. It is how insurance works. Insurance companies do not care who the owner is or what they do with the money, except for home contents insurers who often insist on direct replacement of goods.

 

[wench]

Because most horse insurance will only pay death value to owner... Not policy holder

 

[khalswitz]

Life insurance and property insurance are two very different things!!

 

[HighFive]

Well I'm one who thinks the OP should pay put the owner, although it seems they could get off lightly by paying the owner half.

Saying you have paid for keep of the horse for five years doesn't fly with me, you don't assume ownership because you are looking after the property you have been allowed to use. I would have thought that taking out insurance is a smart idea, it's to cover YOURSELF in the unfortunate event resulting in You not being able to return the horse to the owner, in the condition it left in.

of course we don't know the full story regarding the signed agreement, but it's clear who has lost a large asset. The OP can take on a new loan, and continue on as normal ( although apparently quite a bit heavier in the pocket) while the owner has to now try and replace the horse, out of their own pocket. I honestly have no idea how the OP has managed to insure the horse without the owner being the beneficiary.

 

[cronkmooar]

This is not true. You have to have an insurable interest.

However, in the context of this particular scenario the insurer does have an insurable interest and should receive the insurance payment

Example being, horse insured by loaner, vet fee claim - payment does not go to the owner.

You can put a caveat on the policy that the owner is to receive any payment relating to death - however the owner revoked their right to payment in writing.

This letter was probably required by the insurance company when the policy was taken out

 

[doriangrey]

It's straightforward enough for me. If I were to loan out one of my horses and wanted to recoup the value upon its death (if it happens whilst on loan), I would continue to pay the insurance because I still own the horse. If I decided that I didn't want to pay for insurance then I wouldn't have lost out as it would have been my choice not to recoup the value on death whether the horse was on loan or not. If the loanee wanted to 'invest' in insurance to replace a lost ride that's their perogative and I would not expect payment for a horse that I had already decided (by not insuring) I would get nothing for on its demise.

 

[Wagtail]

Because most horse insurance will only pay death value to owner... Not policy holder

I have insured several loan horses with different insurers. There was no clause to that effect, only that it would be paid to the policy holder.

 

[wench]

My insurance would not pay death value to loaner only owner. Someone also has some research a few pages back and can only find one that will pay death value to loaner

 

[Cowpony]

Why are so many people questioning that an insurance company would pay out to someone who does not own the horse? Insurers pay out to the POLICY OWNER not the horse owner. I could take out life insurance on anyone of you for example. I do not have to be related to you or be a financial dependant. It is how insurance works. Insurance companies do not care who the owner is or what they do with the money, except for home contents insurers who often insist on direct replacement of goods.

Actually you couldn't. This is from the Prudential (sorry, can't cut and paste it so this is a quote):
"The doctrine of insurable interest states, broadly speaking, that in order to have a valid policy of insurance/assurance the policyholder must:
(1) gain a benefit from the continued existence of the item being insured; or
(2) suffer a loss on its destruction
This concept applies to all forms of assurance and insurance, not just life assurance."

It goes on to quote the Life Assurance Act 1774, which says that it is not lawful to make an insurance policy without inserting the name or names of the person(s) interested in the life or event.

 

[ihatework]

Why are so many people questioning that an insurance company would pay out to someone who does not own the horse? Insurers pay out to the POLICY OWNER not the horse owner. I could take out life insurance on anyone of you for example. I do not have to be related to you or be a financial dependant. It is how insurance works. Insurance companies do not care who the owner is or what they do with the money, except for home contents insurers who often insist on direct replacement of goods.

Have you actually tried taking out insurance on a loan horse? Because I have. And ALL 3 Insurance companies I have dealt with request to pay out to the owner irrespective of who pays the premiums. With the added Caveat that the insurance company is informed the horse is on loan.