09 May, 2018, 08:48 ET
BOSTON, May 9, 2018 /PRNewswire/ -- Budgeting for monthly expenses like groceries and utility bills is a no-brainer, but according to a new study conducted by Liberty Mutual Insurance, Americans aren't budgeting for essential home or car maintenance. The research found that the majority (80 percent) of homeowners and (74 percent) of auto owners don't have a plan or budget in place and tend to procrastinate or deal with home and car maintenance issues as they arise. In fact, almost half of Americans (48 percent) have less than $1,000 saved for home maintenance issues or repairs and one in three have no money saved. When it comes to auto maintenance, the majority of Americans (60 percent) are saving less than $500 and more than one-fourth aren't setting aside any money at all.
The costs can clearly add up quickly for consumers if not prepared. For example, according to HomeAdvisor, the average cost to replace a furnace is $4,000, and a roof repair costs an average of $774. Angie's List also reports that replacing four tires costs an average of $637. The Liberty Mutual study reveals that Americans aren't just skimping on savings, but they're procrastinating much more on the home front (69 percent) than with their car (31 percent) when it comes to maintenance and repairs.
"People can be caught off-guard by the true cost of home or car ownership. After accounting for utilities, property taxes and insurance, you also need to budget for ongoing maintenance and big-ticket repairs like a busted furnace, a leaky roof or even new tires," says DIY expert and television personality Chip Wade. "It's recommended to budget one or two percent of your home's purchase price to cover annual maintenance and repairs—or, setting aside $1 per square foot annually. It's smart to start saving today for tomorrow's obstacles."
The research also found some surprising cross-generational findings on the home front—specifically that older doesn't always mean wiser: Baby boomers and older generations are the least likely to save for home maintenance or repairs. Fifty-seven percent of boomers said they would deal with maintenance as needed but don't have a plan or budget for it as compared to Gen Xer's (51 percent) and Millennials (32 percent).
"Home and auto repairs are inevitable and it's important for Americans to make a plan, which will save them from future headaches," said Emily Fink, chief marketing officer, U.S. Consumer Markets at Liberty Mutual Insurance. "We're committed to offering resources, expert advice and customized insurance coverage to help consumers proactively stay ahead of upkeep for their home and car."
Severe weather can also pose a problem for homeowners and auto owners. Whether it's a hurricane, tornado, snow storm or thunderstorm, it's important to be prepared before the storm hits. The study found that almost one third (31 percent) of homeowners do not proactively prepare for major weather-related events, leaving them vulnerable to potential home and car issues.
Chip Wade and Liberty Mutual offer the following tips to proactively avoid home and auto issues.
- Budget Wisely – Plan to set money aside each month for home and car upkeep. Resources such as Dwellbeing, currently in beta, help homeowners proactively maintain their home with personalized task-oriented notifications. For car owners, make sure you have a protection plan, especially if it's an older vehicle and the warranty has expired. Liberty Mutual offers ForeverCar, which specifically tailors vehicle service plans to the needs of its consumers, offering a variety of price points and options.
- Planning is Key: Determine the maintenance projects you can do yourself to save money and the projects you'll need to hire a professional to complete. If you are planning a major home improvement project don't forget to contact your insurance provider to be sure you have the appropriate coverage. In fact, the study found that the majority of homeowners (61 percent) do not contact their insurance provider following a major home improvement.
- Know What it's Worth: In addition to being proactive about taking care of your home, it's also important to understand the value of what's inside so it's properly protected. Half of those surveyed didn't know the value of what their belongings were worth, despite 40 percent saying they were confident in their coverage. In addition, nearly half of renters (47 percent) don't have renters insurance to protect their belongings. Don't procrastinate protecting your valuables until it's time to replace them.
For more expert advice, best practices and inspiration visit: www.libertymutual.com/masterthis.
About the Study
Liberty Mutual Insurance commissioned ORC International to conduct a quantitative survey that looked at home and auto topics among adults across the United States. The survey was conducted March 2018, among 2,051 consumers 18 years of age and older. Overall the findings from the Home and Auto Study can be interpreted at a 90 percent confidence interval.
About Liberty Mutual Insurance
Liberty Mutual's purpose is to help people embrace today and confidently pursue tomorrow. Keeping this promise means we are there when our policyholders throughout the world need us most.
In business since 1912, and headquartered in Boston, Mass., today we are a leading global insurer with operations in 30 countries and economies around the world. We are the third largest property and casualty insurer in the U.S. based on 2017 direct written premium data as reported by the National Association of Insurance Commissioners. We also rank 75th on the Fortune 100 list of largest corporations in the U.S. based on 2016 revenue. Liberty employs more than 50,000 people in over 800 offices throughout the world.
The sixth largest auto and home insurer in the U.S., Liberty Mutual (www.libertymutual.com) sells full lines of coverage for automobile, homeowners, valuable possessions and personal liability insurance. We are an industry leader in affinity partnerships, offering car and home insurance to employees and members of more than 15,000 companies, credit unions, professional associations and alumni groups.
SOURCE Liberty Mutual Insurance
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