An insurer has been ordered to cover a horse’s veterinary costs after failing to prove its owner knew it had a tumour when she bought her equine policy.

Lloyd’s Australia declined the woman’s claim, arguing the skin tumour was present and should have been disclosed when she took out cover on July 29 last year.

But the owner insisted she did not notice a lump on the horse’s jaw until about August 25. The tumour was surgically removed on September 8.

The insurer relied on expert evidence suggesting the tumour was probably developing for longer than the 41 days between the policy starting and the surgery.

It argued some signs of the condition should have been apparent when the cover was purchased.

However, the Australian Financial Complaints Authority says the medical evidence does not establish the tumour was visible or clinically significant at the time, or that the owner knew or reasonably should have known about it.

Related article: Ombudsman backs driver in fiery dispute over car claim

Photographs from May and June showed no lesion, and a vet’s discharge records state the lump was first noticed about two weeks before the September admission.

AFCA has also rejected the insurer’s bid to rely on a 14-day post-purchase waiting period exclusion for illnesses.

It says it gives “significant weight” to the vet’s discharge records, which are “broadly consistent with the complainant’s account that she first noticed the lump in late August 2025”.

The insurer must accept the claim and pay $1500 compensation for causing “distress beyond the ordinary stress of a disputed insurance claim”.

AFCA says the insurer’s repeated challenges to the woman’s credibility, including “references to her credit, and its suggestion that adverse inferences could be drawn from her inability to provide further information, unnecessarily personalised the dispute”.

See the ruling here.