When it comes to protecting your horse, insurance can feel like a maze of terminology. One phrase that often causes confusion is Permanent Loss of Use (or commonly known as LOU). Understanding what it really means – and how it differs from other parts of your policy – can help you make confident decisions during what is often an emotionally difficult time.
What is Permanent Loss of Use?
Permanent Loss of Use refers to a situation where a horse suffers an illness or injury during the policy period that leaves it totally and permanently unable to perform any of the activities it is insured for.
A claim can only be considered once a vet confirms that the horse will never again be capable of carrying out its insured purpose. This confirmation usually comes after treatment, rehabilitation, and a period of reassessment to ensure every reasonable chance of recovery has been explored.
The two types of Permanent Loss of Use cover
There are two main types of Permanent Loss of Use cover:
- Accident Only LOU
Covers only external accidental injuries that result in permanent disability. - Accident + Illness LOU
Provides broader protection, covering permanent loss of use caused by illness as well as injury.
Because the scope of cover varies, always check which type you are being quoted for.
Loss of Use vs Loss of Horse (Mortality)
A common misunderstanding is mixing up Loss of Use with Loss of Horse, which is typically found under the Mortality or Death and Theft section of the policy:
- Loss of Horse applies when a horse dies, is humanely destroyed for welfare reasons (meeting BEVA Guidelines) or is stolen.
- Loss of Use applies when the horse is alive but can no longer perform its insured activities.
These sections serve very different purposes, so it’s worth keeping them clear in your mind.
Additional requirements to be aware of
Different insurers may have specific conditions attached to LOU claims. For example:
- Your vet must confirm that the horse will never return to its insured activities.
- Some insurers require the horse to be freeze branded with an “L” inside a circle once a claim is paid. This acts as a visible identifier that the horse has been the subject of a Permanent Loss of Use claim.
Always check the policy wording for these requirements, as they vary between insurers.
Check the limits before you buy
Insurers offer different LOU payout limits—some pay a percentage of the horse’s insured value, others offer fixed sums, and the conditions for payout can differ widely. When comparing quotes, look beyond the price and consider:
- The type of LOU offered
- The payout percentage
- Any exclusions
- Requirements for branding or vet reports
The emotional and practical decisions that follow
One of the toughest parts of dealing with a LOU situation is deciding what happens next for the horse. If the claim is approved, owners may face choices such as:
- Retiring the horse, if its welfare can be maintained.
- Electing for economic euthanasia, if retirement would lead to long-term suffering or compromised welfare.
Your vet can help guide this decision by assessing whether your horse’s wellbeing would be negatively affected by a retired lifestyle.
Permanent Loss of Use cover can feel complex, but understanding the details makes it easier to choose the right protection for your horse. If you’re unsure which type of cover suits your needs, speak to an equine insurance specialist who can guide you through the options.
Ready to protect your horse with confidence?
Get in touch with our team today for expert advice and a tailored equine insurance quote by calling 01743 455911 or getting a quote here. We’ll help you find the right cover for your horse’s lifestyle and your peace of mind.