Originally Posted by Linny

Insurance on an in training horse is very high. The biz is small and once figures like $10m, $30m, $50m etc get bandied about the insurance company rep calls to tell you that your rates just went up, even if you have not closed any deals. If you get offered $20m for your colt and are taking time to decide, race him in the Cigar Mile, contemplate a 4yo campaign etc, the insurance guy and you both know that that offer constitutes an (informal) assessment of his "value."
Depending on the rates, at some point it becomes to expensive to race. if he cannot be expected to make enough to cover costs (training, vet, shipping, insurance etc) it's better (business) to sell. OTOH, if racing is for you a labor of love, something you want to do, maybe you bite the bullet and go on. If you are wealthy, your family taken care of and comfortable that the $20m wont change your life and you derive great pleasure from seating your beat race, you go on.
Mrs Valando should be an idol to all who rue the breeding tail wagging the racing dog. Last winter when her horse was the "buzz horse" she declined $17m for Nobiz. She LOVES seeing him race. She named him for her departed husband and by continuing to race him she honors his memory. For her, it's not about how much does this cost vs how much can I make. She loves the game.

Originally Posted by ELA

The real issue, with regard to the insurance aspect, is not "value" per se (even in receiving offers) -- it's "capacity" in the marketplace. At a certain point, underwriters and insurance companies (incuding reinsurance, surplus lines, excess markets, etc.) will not want to take on "risk" and won't even offer coverage regardless of the premium. At certain levels, we are not talking about insurance companies any longer, we're talking about underwriters for consortiums, investor pools, risk pools, etc. (like Lloyds of London).

Eric