Why Roshan Kanesan bought pet insurance for his puppy.

On August 27th 2022 at the Paw Wow Woof Gathering at Ardence Labs, I finally pulled the trigger and bought Berkshire medical insurance.

Berkshire is my 1-year-old puppy. And yes, he’s named after Berkshire Hathaway (because I’m that kind of nerd).

So, why did I finally pull the trigger? Let’s get into it.

Paw-tecting My Reserves

“Yes, you can afford to cover RM3,500 on your own Roshan, but what if– God forbid– the vet bill ends up being more than RM3,500?” (My Girlfriend, 2022)

That’s the line that (more or less) made the decision for me.  

Initially, I kept thinking “Do I really need pet insurance? After all, what are the odds that he will need medical cover? And even if Berkshire ever does need medical attention, I can cover it with my emergency funds.” Perfectly logical, right?

Yes, BUT!

Even if I could handle his medical bills on my own, having medical cover for Berkshire will also help protect my Emergency Funds. Instead of having to dip into my reserves, I can now budget my pet’s potential medical costs as a part of my regular expenses. Now, all I need to do is save the necessary amount on a monthly basis into my MAE tabung for my next annual payment. 

By doing this, I’m offsetting the risk of a sudden big-ticket expense jeopardizing my very precious reserves. If you can anticipate a thing and plan for it, then ideally it shouldn’t be something you dip into your Emergency Funds for. 

As much as possible, emergency funds should be for the things that come at you out of left field. I would like to think my puppy is never going to wind up at the vet, but realistically, it’ll probably happen at some point. Puppies, like children, do stupid things sometimes. (That wire is not tasty, Berkshire! Ah, you’ll learn when you get zapped.)

Meow-naging Cash Flow Expectations

‘But Roshan, if you never end up utilizing it, aren’t you just throwing money away?’

Well, yes and no.

As long as it is within my cash flow– meaning I can still cover my other commitments, expenses, and continue to save– I find the ability to manage risk like this to be very valuable. Berkshire’s pet insurance, along with other (human) types of  insurance policies, helps make my cash flows more predictable, which in turn helps me plan better financially. 

Yes, there is a chance that the policy might not cover the whole medical bill should it end up being over my current plan limit of RM3,500 (in that case, enter Emergency Funds) but it still reduces the overall cash flow shock.

All I have to do is make sure I’m saving up the relevant amount on a monthly basis to pay for the annual premium.

 

And now, the puppy tax:

Mr Berkshire Hathaway

 

What are your thoughts on pet insurance? Share with us your stories.

 

MyPF Story is a series focusing on personal stories by licensed financial planners and Malaysians. If you have a story you would like to share, get in touch with us so we can document it. 

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