Flattening the property-risk curve
Chubb's Fourth Annual Homeowners' Risk Report reveals that some homeowners are putting maintenance on the back burner during the pandemic.
The COVID-19 pandemic has disrupted daily rituals and routines to an unprecedented degree. Our homes have become the center of our lives, functioning as offices, classrooms, movie theaters and recreation centers.
With more time being spent at home than ever before, it’s natural that homeowners’ attitudes and behaviors toward property risk have evolved during this time.
Interestingly, Chubb’s Fourth Annual Homeowners’ Risk Report reveals that some homeowners may be putting home protection and maintenance on the back burner. While it’s understandably challenging to prioritize home protection and maintenance needs when there are so many competing stressors, the reality is that property risks aren’t going anywhere. Interior water leaks and weather-related wear and tear are continual challenges — and the proper risk mitigation tactics and insurance coverage should undergo continual evaluation as well.
Property risk isn’t on hold
Despite remaining aware of home maintenance and protection needs, Americans are starting to let their guard down. Chubb’s 2020 survey results reveal that 60% of respondents are concerned about day-to-day upkeep, 45% are concerned about maintaining home value, and 38% are concerned about weather-related damage. Conversely, in 2019, 72% were concerned about day-to-day upkeep, 81% about maintaining home value, and 75% about external or weather-related water damage.
This significant decrease in attentiveness comes at a cost: Roughly 20% of homeowners reported experiencing some form of water damage since they began isolating and distancing due to the pandemic. To put that in perspective, that’s the equivalent of roughly 25 million U.S. households.
When asked which home improvement projects they wanted to complete, Chubb found that most homeowners were looking to create a space that fostered a better work/life balance. Top areas for investment among homeowners under 45 were: living room (27%), backyard (25%) and fully functional home office (23%). For comparison, in 2019, those under age 45 were more focused on updates to their kitchen (44%), master bathroom (39%) and master bedroom (29%), revealing a significant shift in priorities.
Complicating matters further, COVID-19 has made taking steps to prevent damage challenging for many. According to survey data, a third of all homeowners have delayed home maintenance due to the pandemic, and 45% report that COVID-19 has hindered contractors’ ability to address maintenance needs. And even though 89% of homeowners were “very” or “somewhat” confident in their ability to check for possible damage or maintenance issues themselves in 2019, they don’t seem to be taking proactive steps to do so. Homeowners are employing basic home maintenance and protection measures such as checking appliance hoses, inspecting home heating systems and conducting water heater maintenance in less than a third of cases.
How agents and brokers can help
Since what starts as a minor nuisance can lead to major home damage, agents and brokers should encourage clients to address potential property issues as soon as possible. According to Chubb claims data, a single internal water leak now averages in excess of $50,000 and causes significant distraction and frustration to clients to remedy.
Aside from taking the precautions listed above, agents and brokers should remind clients of other helpful property damage safeguards such as water shut-off devices. Chubb’s survey reveals that roughly three quarters (74%) of homeowners have not installed a water shut-off device. Water shut-off devices can help stop widespread water damage in its tracks, which can be especially helpful for homeowners with multiple properties they aren’t able to check on regularly.
A significant opportunity for agents and brokers is to determine if your clients’ insurer offers water shut-off devices at no additional charge as part of a qualifying plumbing-related water damage claim. Few homeowners are aware of this potential offer and even fewer know that once you’ve had one plumbing loss, data suggests you are twice as likely to have another. Taking advantage of an offer to have water shut off devices installed in their homes at no additional cost to them can help ensure less future heartache and inconvenience for your clients in these disruptive times and beyond.
Additionally, agents and brokers should make sure their clients are aware of safety best practices for hiring contractors to complete necessary repairs during this time.
Considerations for homebuyers
Chubb also fielded an additional 2020 Chubb homeowners survey and found that 18% of successful families and individuals in 2020 are moving at twice the rate the general population moved in 2019. That means over one million households could be in the market for homes. Agents and brokers should make sure clients looking to follow suit aren’t leaving themselves vulnerable to unexpected risks.
Aside from considering factors such as proximity to natural disaster-prone areas and how outdoor spaces have been maintained, it’s important for homebuyers to ensure they have the proper insurance coverage in place. Working with carriers that have expertise in properly assessing replacement cost for unique home characteristics is especially relevant when a client moves from a condo to a home for the first time.
It’s also crucial for homebuyers purchasing secondary or additional properties to remember that just because their original residences are out of sight, it doesn’t mean they should be out of mind. This is especially true for homeowners who are renting out their properties. Chubb’s survey revealed that when renting out secondary homes, less than half of homeowners provide renters with information about some of the most common home issues, such as alarm systems, fireplaces, and outdoor barbeque grills or kitchens. Thus, agents and brokers must remind clients that it’s critical to share resources with renters that will help them address any issues that may arise. Lastly, ensure you solicit information from your clients about their plans to rent out their properties as not all insurers offer the same levels of protection in these instances.
Starting 2021 on the right foot
As we turn over a new leaf this year, more is sure to change. Still, homeowners must not turn a blind eye to potential sources of damage. Agents and brokers should help homeowners understand property risks and ensure they have the proper insurance coverage in place when they’re looking to protect their primary and/or additional residences. After a roller-coaster of a year, dealing with damage to their homes — their safe havens during the pandemic — is the last thing people should be worried about.
Ana Robic is chief operating officer at Chubb Personal Risk Services. She can be contacted at arobic@chubb.com.
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