It’s true—we’re all busy. Life can be hectic and you have to prioritize your time as well as your money.
When it comes to your home, it can be easy to slide into the “if it ain’t broke, don’t fix it” mindset. Ignoring small repairs might seem like a good way to save some cash and time, but putting off regular maintenance for too long can lead to bigger problems and more costly insurance claims.
According to a 2024 Hanover study, scarcely 38% of homeowners have examined the integrity of their roofs in the past year. Just 39% checked the condition of their water heaters, and only 40% cleaned their gutters. Not focusing on the risk of loss from these vulnerable areas of the home could be a financial mistake.
To potentially save bigger dollars, a better mindset might be “an ounce of prevention is worth a pound of cure.” Here are some reasons why.
Larger claims, more often
A house is a big investment. But putting off essential maintenance tasks increases the chance of damages or accidents happening. For example, an old roof or outdated plumbing may lead to water leaks, mold, and damage to your home’s structure. By the time you notice, you could be looking at thousands of dollars in repairs.
The leading cause of home fire property damage is electrical distribution or lighting equipment, according to the National Fire Protection Association. Not upgrading your electrical system, or short circuits from defective and worn insulation, could lead to a disaster.
Not only do these pose safety issues for you and your family, but claims from delayed maintenance on situations such as these are usually severe and expensive.
Negligence impacts your insurance provider…which impacts everyone
Insurance companies are obligated to pay the claims filed by their policyholders. As claims become larger and more frequent, these companies face increased financial liability, putting a strain on their resources. To maintain financial stability, insurers are often faced with raising their premiums to offset higher claims, including those due to neglected maintenance.
Further, premiums collected from all policyholders go into a shared risk pool of funds to cover potential claims. Those who neglect their properties introduce higher risk across the pool. Insurers respond to this increased risk by raising premiums for everyone to ensure the collective funds are adequate to cover the growing number of claims.
Individual impact
When you neglect maintaining your home for too long, it may create emergencies out of what were smaller issues, at more cost to you. You may also have higher energy bills if you don’t change out your furnace filter or if your air conditioner has a refrigerant leak, for example. Further, if you want to sell your home and it shows signs of wear and damage, it will likely lose some of its potential value for the sale.
Community impact
When insurance premiums rise due to increased claims based on neglected maintenance, it affects the entire community because the shared costs rise for everyone involved. Safety issues also increase, whether it’s a neighborhood, apartment building, condo, or investment property. So even if you’re a responsible homeowner, you may still be impacted by others’ neglected maintenance claims one way or the other.
Environmental impact
Things such as a leaky faucet or running toilet waste water, which takes a toll on our environment and leads to higher utility bills. According to the Environmental Protection Agency, household leaks can waste nearly 10,000 gallons of water annually. Leaky doors and windows can make your heating and cooling systems run less efficiently as well, contributing to unnecessary greenhouse gas emissions and increasing your energy bill.
Insurance industry trends
With rising costs due to more severe storms, higher material and labor costs, and increases in claims, there are certain trends taking place throughout the insurance industry regarding home insurance, including:
- Providing actual cash value instead of replacement value for roof damage. This means that older roofs will have lower payouts due to depreciation.
- Higher mandated deductibles for wind/hail damage.
- Limited coverage for cosmetic damage to metal such as gutters, downspouts, etc.
What can you do as a homeowner?
The costs of neglecting your property have a ripple effect. While it is the choice of the individual as to what they do to their own home, in the larger picture it is a shared responsibility. Here are some things you can do to help keep insurance costs down.
Budget ahead for home maintenance tasks. According to Angi’s 2023 “State of Home Spending” report, the average annual cost of home maintenance projects was $2,458; home emergency spending was $1,667.
- A common rule is to save 1%–4% of your home’s value per year (Investopedia). If you’re on a tighter budget, you may want to set a dollar amount that you can reach, even if it’s not 1%. Anything you can save may help prevent you from having to borrow to pay for repairs or procrastinate on repairs. And saving early can help you spread out the costs of repairs and upgrades over time instead of facing a larger unexpected expense.
Prioritize the upkeep of your property. Some key areas to pay attention to include:
- Prune dead and low-hanging tree branches to help prevent roof damage, and inspect your roof after storms.
- Schedule regular maintenance on your furnace and central air conditioner, and keep up on replacing filters…dirt and debris can make your units work much harder and cost you more to run.
- If you have an older home with an outdated electrical system, it should be replaced by a professional. Faulty wiring can lead to a fire. Avoid overloading outlets as that is also a major cause of residential fires.
Invest in weatherproofing your home, including storm-resistant windows, landscaping, and drains.
Consider modernizing your heating, plumbing, and electrical systems to reduce the risk of fire and water damage.
Let us help
If you have questions about your current insurance or would like an insurance quote, contact us. We’re here to help.
1-800-279-4030
weabenefits.com/consults