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Animal Insurance

You can purchase animal insurance for full mortality. Many people researching alpaca ranching as a business are concerned about the risk of losing their investment due to the death or theft of their animals. An investment in alpacas is a significan "at-risk" business expense. Should an alpaca be stolen or die for any reason, the owner risks losing his financial investment. Fortunately, alpacas and llamas can be insured for full mortality. Should an insured alpaca or llama be stolen or die for any reason, the owner can recover the full insured value of the animal. The IRS allows owbers to use Schedule F (Farm) to take a 100% deduction for livestock insurance as a business expense.

Many alpaca and llama breeders, who finance the sale of their animals require the buyer to purchase a full mortality insurance policy as part of the sales contract. The seller will be listed as the loss payee with the insurance company. So not only does the buyer have protection, but the seller has protection also.

In addition to death and theft insurance, a policy can also cover the following situations:

  • Major medical
  • Surgical
  • Infertility
  • Loss of use
  • Special specified perils

Estimating the Insurance Value

An alpaca or llama can be insured for its paid purchase price. You can also increase the insurable value if the animal has honors, such as championship titles, futurity cash prize winnings, performance levels, and the production of valuable offspring. Typically the insuring company asks for proof of such honors and a veterinarian's health certificate. Sentiment, replacement cost, and loss of profits from future stud fees and offspring are not part of the animals's insurable value.

Applying for Livestock Insurance

Livestock mortality insurance is a form of term life insurance. To be insured, the alpaca must be sound and in good health on the effective date of the policy. A veterinarian's health certificate, verifying to the animal's good health and condition must be submitted with the application. In addition, the application must include the name, sex, age, use (for breeding), and registration number of the alpaca. Applications must be signed by the owner or the authorized representative. Typically an insurance company will charge about 3% of the alpaca's purchase price per annum for animals over the age of 90 days.

This page was last updated on June 10, 2009.

Able Oaks Ranch 6167 FM1857 S. Rusk TX 75785 | 903-530-1009