Protecting Your Pets and Your Wallet
About a month ago, our family welcomed Comet, a young and playful boxer mix with velvety light brown fur. When we adopted him from One Tail at a Time Rescue, we learned that Comet came to Chicago from Texas after a frozen pipe burst in his shelter during the last winter’s harsh storms. While he can be a bit rambunctious at times, Comet enjoys snuggling on the couch every night and taking long naps in the sun during the day.
Before we adopted Comet, our family discussed who would help with walks, researched training classes, and went shopping for toys and treats. We made sure we were emotionally and financially prepared to take on the responsibility of a new dog.
If you are thinking about adopting a furry new friend, I’m sure you know there will be added costs to your monthly budget. However, beyond dog food and supplies, and love and attention, pets also need some financial planning!
Pets are living longer, healthier lives due to advancements in veterinary medicine and technology. New treatments for animals, such as chemotherapy, laser surgery, and deep dental cleanings are available, as well as diagnostic tools such as x-rays and ultrasounds. All of this can make a trip to the vet quite expensive. Pet owners can face difficult financial decisions when evaluating medical care.
Pet insurance is a popular tool to help offset the financial burden of unforeseen medical expenses. Different levels of insurance offer various levels of coverage, and some plans even include wellness visits and routine vaccinations. Many employers offer subsidized pet insurance to their employees as a fringe benefit. By investing in pet insurance, you can lower your financial stress during a medical emergency.
Accidents happen, and pets can be a liability to their owners. A dog with separation anxiety could shred your couch or scratch up your walls while you’re out. A cat may bite a guest, which can result in infection and hospitalization. Having the proper insurance coverage in place will protect you in these unfortunate situations.
When planning to bring new pet into your home, you should review your homeowner insurance policy and umbrella policy with your insurance agent to determine the appropriate coverage. Dog liability insurance is offered by some companies to fill gaps in existing coverage. Some insurers place restrictions on specific dog breeds and exotic pets or charge higher premiums for them, so you will need to review these details with your provider. Taking the time to evaluate your liability coverage will help give you peace of mind and protect your wallet after a mishap.
Occasionally, you’ll hear a story about a dog inheriting a fortune from his owner so he can continue to live a life of luxury. However, that fairy tale is not common for most pets. Each year, countless cats and dogs are surrendered to local animal shelters because their owner moved to a nursing home or passed away, and the remaining family members do not want to care for it.
Since your pet depends on you to meet their daily needs, you should create a plan for who should care for it if you are no longer able. Talk to the new potential caregiver and make sure they are able to take on the responsibility. Then, discuss the situation with your estate planning attorney to determine whether you need formal instructions in writing. Having a plan in place will create a less stressful situation for all the animals and people involved.
As Comet adjusts to life with the Velgara Family, we are all learning that things don’t always go according to plan. I’m already responsible for more walks than I had originally planned (shocking!), and we’ve had to call the vet regarding some Legos Comet may or may not have eaten.
The good news? By signing up for pet insurance, talking to my insurance agent, and assigning a caregiver for him in my estate plan, Comet fits perfectly in my family, and my financial plan!
Terri Velgara, CFP®
Terri is a Financial Advisor and Director of Financial Planning at Rappaport Reiches Capital Management. She serves as a resource for our firm's advisors in designing plans that empower clients to achieve their personal and financial goals. Please connect with Terri below. She loves to talk about investing, financial planning, and family game nights!
The author does not intend to provide investment, legal or tax advice as these materials are for general educational purposes only. Please consult your legal, tax or investment professional for advice on your particular situation. This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not guaranteed. It is not intended to be a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results. Please refer to RRCM’s Form ADV Part 2 for additional disclosures regarding RRCM and its practices.