Economic Shock is Hidden Threat to One-Third of Americans

Economic shock is a large, unexpected expense such as a home or car repair or sudden loss of income – something many experienced during the recent economic downturn.

COVID-19 has hit hard – but nowhere harder than with our most vulnerable populations. The widespread unemployment caused by the pandemic has taken a bite out of the savings of many, especially those with lower incomes, with 44 percent of those households with incomes of $50,000 or less saying that their savings have dropped since March.

Many Homeowners Are Unprepared

Old homes have unique charms, but they also may be hiding plumbing problems in their walls and floorboards.

One-in-four adults have reported having trouble paying their bills, with this increasing to 46 percent among those with lower incomes. Many of those most at risk, including minimum wage-earners, minorities, mothers with young children and those without secondary education, are returning to work at a slower rate. In a Federal Reserve survey, 40 percent of adults said they would have to borrow from family and friends or go into debt for an unexpected expense of only $400. More than 10 percent said such an expense would prevent them from paying all their bills in that month.

While some Americans save, others either don’t or are unable to, leaving them vulnerable to economic shock.

Even before the economic downturn, 71 percent of those working a minimum wage job had difficulty meeting their basic bills, according to a survey conducted by The Harris Poll. Financial woes are not limited to those at the bottom of the wage scale, with nearly 80 percent saying they lived paycheck-to-paycheck at least sometimes. Debt is up and savings are down across the board, with just over 50 percent saving $100 or less each month.

The Biannual State of the Home

Nearly 70 percent of Americans would like their utility to provide an optional emergency home repair plan to help them avoid financial shock

A wide swath of Americans have been made more susceptible to a financial shock than ever, and, at the same time, many of them are spending more time at home than ever before, whether it is because they are unemployed, working from home, have children attending virtual school or are self-quarantining. That means greater stress on their home’s plumbing and electrical systems and higher bills. Unfortunately, many are at the juncture where their unusually stressed home systems and their depleted savings are leaving them at risk for the financial shock of an emergency home repair.

Unfortunately, all that time at home is taking a toll on our plumbing and electric – 62 percent of those polled in HomeServe’s Biannual State of the Home Survey reported that they had had an emergency home repair in the last 12 months. Among those needing a repair, 23 percent reported their HVAC system needed repaired, 16 percent reported leaky pipes, and 15 percent reported a blocked or overflowing toilet. Exacerbating the issue, many don’t have robust savings. Nearly one-third of Americans have $500 or less set aside for an unexpected financial demand, and nearly half have $1,000 or less set aside, according to the survey.

Many Homeowners are Uncertain

Home repairs can make a dent in your wallet, ranging anywhere from approximately $600 dollars to more than a thousand to replace a water heater, depending on where you live and what type of replacement you’re installing, to several thousand dollars for a sewer service line replacement or repair.   

Fortunately, homeowners have somewhere to turn: Service Line Warranties of America. Our optional emergency home repair plans give our customers access to our U.S.-based call center with live operators available 24/7/365 and our nationwide network of thoroughly vetted, licensed and insured contractors. With a call to our call center, we will dispatch a local contractor to handle your issue and pay the associated costs up to the benefit amount. For more information on how we can protect you from financial shock, contact us.

Older Homes Are Prone To Plumbing Problems

Old homes have unique charms, but they also may be hiding plumbing problems in their walls and floorboards.

Older homes can have a host of problems with the plumbing that homeowners can’t see – it may simply be old and reaching the end of its usable lifespan, the plumbing may have been made of materials that later proved to be problematic or an amateur plumber may have made repairs.

Old Pipes

Plumbing has a lifespan, from the water lines and fixtures to the drains and sewer lines. Copper lines will last the longest, at 60 to 80 years, followed by cast iron drains and sewer lines at 50 to 65 years. Galvanized steel, used for both water and sewer lines, lasts about 40 to 60 years, followed by polyvinyl chloride, or PVC plastic, at 40 to 50 years, then PEX at 40 years.

Fixtures need replacement more often – and they aren’t limited to faucets, although those should be replaced every 15 to 20 years. Water heaters should be replaced more often, at 10 to 20 years, and shut-off valves should be replaced every 20 years, or they may become frozen in the “on” position. Sinks, tubs and toilets are the sturdiest of home plumbing fixtures, needing replacement every 40 to 80 years.

In addition, some of the oldest homes were built before plumbing was common and were retrofitted with plumbing later. In order to update those aged pipes, plumbers may need to drill through floor joists or install drop ceilings so there is room for the appropriate slope for gravity-fed drains. It’s important that licensed plumbers do this work because they will ensure that the work is done in such a way that it doesn’t compromise the structural integrity of the floor above.

As pipes age, their joints may begin to loosen and the pipes sag, causing “bellies,” as they separate. A belly is where debris, rust or minerals can collect where a pipe sags, causing clogs and stoppages.

Problematic Pipes

Highly acidic water, hot water, highly chlorinated water or water that has remained stationary in a pipe for a long time can leach lead from pipes or lead solder used on brass pipe fittings. It’s estimated that 10 million homes have water service lines that are at least partially lead – and homeowners are responsible for the maintenance and replacement of the service lines that connect your home to the utility’s system. In many cases, there is simply no record of whether a water service line is lead or not, although it is more prevalent in older homes, since lead water service lines were popular before 1950.

Lead lines aren’t the only plumbing homeowners should be on the lookout for – polybutylene pipe, or “poly,” was popular because it was inexpensive, from its introduction in the mid-1970s through the mid-1990s and is found in another 10 million American homes. However, poly piping fails at an abnormally high rate under normal conditions. Poly pipes react poorly to oxidants in water, flaking away from the inside out, so a poly pipe may appear in good shape during a visual inspection. It, too, is prone to faster degradation when exposed to high levels of chlorine and hot water.

In addition, use of galvanized steel piping also has been discontinued, except for repairs of existing systems. It was introduced as an alternative to lead lines, often used for water lines prior to the 1960s, until it was discovered in the early 1970s that it could corrode from the inside out and rust would build up within the pipe, narrowing the diameter of the pipe and causing water pressure issues.

Some home insurance companies will refuse to insure homes with poly or galvanized steel piping or require high deductibles before a home with known problematic plumbing can be insured. If you are purchasing a home with poly or galvanized pipes, you may be required to have a licensed plumber to certify the system before it can be insured. It also will lower your home’s resale value and make it more difficult to find a buyer.

Then there’s Orangeburg sewer lines – pipes made of pressed wood fiber and coal tar, now scorned as “coal tar-impregnated toilet paper tubes.” It was most popular in the 1950s and 1960s, because, once again, it was inexpensive. Since it was widely used, homes dating from that time are at risk – Orangeburg pipes have higher failure rates than any other sewer line material. Because they are paper based, they are more prone to chemical deterioration. Orangeburg also is vulnerable to crushing during ground settling and tree-root intrusion, because it deforms under pressure, since it isn’t as rigid as other materials.

Amateur Plumbers

You may be tempted to save money by having someone other than a licensed and insured plumber repair your plumbing. In doing so, you deprive yourself of a professional plumber’s expertise and training. Additionally, non-licensed plumbers often will not warranty their work and they may not carry the appropriate liability or workers compensation insurance.

Amateurs often make mistakes that professionals wouldn’t, such as using accordion pipes, which makes connecting two different pipes easy, but also is more prone to buildups of grime and debris. An amateur also may not know how to prevent corrosion when pipes made of two different types of metal are joined, a process known as dielectric coupling – they may not even know it’s a problem.

A professional plumber will be familiar with local building codes and be sure to have repairs done in compliance. It may cost more, but a failure to have repairs done to code may result in fines or having work re-done so that it meets the required standards. Plumbing repairs also may require going into walls, ceilings and floors or even require trenching. In addition, if an amateur botches a repair and there is damage to the home as a result, the homeowners insurance may not cover the now much-larger repair bill. Amateur repairs can put residents at risk for a host of disasters, from electrocution to gas leaks.

It’s simply safer and less expensive in the long run to hire a properly licensed plumber for repairs, whether a home is older or a more recent build, and having a plumbing inspection done before purchasing a new home also is advisable.

Homeowners can be prepared for leaks or failures in older pipes with the NLC Service Line Warranty Program. The Program offers optional emergency repair home plans to cover water and sewer service lines and interior plumbing emergencies and has live operators available 24/7/365 at a U.S.-based call center. With a network of fully licensed, insured and vetted local plumbing professionals, all repairs are warrantied for a full year and are compliant with your community’s building codes.

For more information on how our plans can provide you with peace of mind, contact us.