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.
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
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.