Key Takeaways
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57% of Americans reported having incurred costs due to extreme weather in the past ten years.
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46% of homeowners say not having enough saved to cover an emergency repair is their biggest concern when it comes to dealing with extreme weather.
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Insurance, personal loans, home loans and lines of credit can help you limit the costs of home repairs due to extreme weather damage.
Inflation has been cooling in recent months but is still nowhere near the Fed’s 2 percent target — something that could last until 2025.
The combination of rising interest rates and higher prices for just about everything has led to tensions in U.S. budgets across the country. As a result, many homeowners feel uncertain about the state of their savings and how to cover emergency repairs due to extreme weather events.
Nearly half of homeowners are concerned about savings and emergency repairs
A recent study by real estate insurer HippopotamusResearch found that more than half of homeowners (53 percent) ignored the impacts of extreme weather in their area before purchasing a home.
With climate-related disasters becoming more common over the past decade, this could put significant dents in homeowners’ budgets. As a result, 46 percent of respondents said their biggest concern when it comes to weather preparedness is not having enough savings to pay for emergency repairs.
According to a Bankrate survey, more than one in two Americans (57 percent) reported having incurred costs due to extreme weather events in the past ten years. The same amount predicts that extreme weather events, as well as climate and environmental changes, will have a negative impact on their finances over the next decade. Nearly a quarter of them also say the effects will be “very” negative.
Furthermore, only 43 percent of Americans are confident they can cover an unexpected expense of $1,000 with their savings. Meanwhile, more than a quarter of homeowners reported spending more than $4,000 on emergency repairs in the past twelve months. This can certainly cause problems, especially during the winter months, with an increased risk of damage from flooding, hail, ice and snow.
Average cost of home repairs due to winter weather damage
Over the past five years, the frequency of winter storms in the US has increased by an average amount 4.3 percentcausing more than $40 billion in damage. The table below shows what homeowners spend on average on winter weather-related repairs, by type of damage.
| Type of damage | Average repair costs |
|---|---|
| Hail | $3,000 – $12,000 |
| Ice and snow | $200 – $1,200 |
| Mold | $1,500 – $3,500 |
| Storm | $2,800 – $5,500 |
| Tree | $1,500 – $5,000 |
| Water | $2,000 – $5,000 |
Source: Fixr.com
How to pay for emergency repairs
While some emergency repairs cost only a few hundred dollars, depending on the severity, those costs can reach $10,000 or more. Having homeowners insurance is the first line of defense when it comes to covering emergency repairs, especially if they are caused by severe weather. That said, sometimes you need more than just a basic policy to keep out-of-pocket costs to a minimum.
“As extreme weather damage becomes more common, homeowners should carefully review their policy each year to understand any changes to their coverage. Homeowners insurance typically covers damage to your home and belongings caused by specific weather conditions or hazards,” says Steve Wilson, Director of Underwriting at Hippo.
“Depending on your location, some providers may not cover severe weather damage or may require customers to bear a greater share of potential losses compared to previous policies. For example, in areas where wind or hail events are more common, many homeowners need to purchase additional coverage. In these cases, storm and flood insurance are separate policies that homeowners can purchase to help shoulder some of the financial burden,” he adds.
Other ways you can pay for emergency repairs caused by extreme weather include:
- Personal loans: These loans are unsecured and can have a fixed interest rate of less than 7 percent, with a repayment period of 24 to 84 months in most cases. These loans can be a lifesaver when paying for emergency repairs, as many lenders offer same-day or next-day financing. But to get the best rates, you need to have good to excellent credit.
- Mortgage loans: A type of second mortgage, home loans currently have an average interest rate of 8.93 percent. These loans are better suited to people who have at least 15 percent equity in their home and need a large sum of money to pay for major renovations.
- Home equity lines of credit (HELOCs): Like home equity loans, HELOCs are another type of second mortgage that requires you to have between 15 and 20 percent of the equity in your home to qualify. Although their rates are slightly higher than home loans at 10.04 percent, they are a better option for those who don’t have a fixed budget for repairs because you can borrow whenever you want.
