What’s the Difference Between Condo Insurance and Home Insurance?

Posted on by cvargas

Insurance is vital, regardless of whether you own a home or a condo. It can help offset damages to your property, so you don’t have to worry about paying for those damages out of your pocket.

happy young couple buying a condo and talking to the property manager
Protect your new condo by learning how condo insurance is different from home insurance.

However, the type of insurance you choose will dictate how any damages to your property will be handled. While both home and condo insurance might cover your property, there are some subtle differences between the two. Here is how home and condo insurance differ:

Condo Insurance

Condo insurance covers any non-communal property that you use as a property owner. Ideally, it should cover certain ‘walls-in’ losses, replacements, and repairs, as well as your personal property. For any damages that happen outside your unit walls, the condo association’s master insurance policy should offset them. But you should always verify the details before you purchase a condo or change your insurance policy.

Condo insurance also comes with loss assessment coverage. In situations where the condo association levies condo damage fees on all unit owners, this will cover the ad hoc fees. Condo associations will typically do this if the cost of offsetting damages to the communal assets is more than what their master insurance policy covers.

Home Insurance

Traditional home insurance tends to be for single-family dwellings, and it can be as simple or complex as mortgage lenders allow it to be. It should cover your entire home structure, including construction materials and other permanent elements. Most insurance policies also cover any personal property that is valued at 50% or greater of the insured home itself. The insurance can also cover other structures within the vicinity, such as detached garages and sheds.

Filing Claims

Filing claims is typically easy for home insurance, as it can be made directly with the insurers. On the flip side, there are some complexities in filing claims through condo insurance, and the specifics will depend on the situation.

For instance, the condo association insurance should take care of water damages as long as they are as a result of burst pipes outside your condo walls. Your condo insurance will, however, take care of damages arising from burst kitchen sink pipes, as they are within the unit’s walls.

Insurance policies tend to have rules that property owners have to adhere to for an easy claiming process. Regardless of the insurance policy you have, it pays to follow these rules. Be sure to read through the fine print of your insurance policy documents to choose the right coverage. If you have any questions about condo insurance or you’re looking for a new policy, we’re here to help. Contact us online or at 617-298-0655 to talk to our team.

What Should You Do If Your Car Insurance Gets Canceled?

Posted on by cvargas

Car insurance is something that we have to have if we legally want to be able to drive our automobile. However, we have all been in situations where we forget to pay for it. Car insurance is something we know we need, but it often falls through the cracks. We either have it or we don’t, but most people generally don’t think about it. 

man smiling and driving a sedan
Talk to your insurance company about your options instead of letting your car insurance lapse.

Did you forget it, or were you out of town and fail to see the “due by” notices? Maybe you moved, and the notice got lost in a moving box. Either way, it can be a frustrating mess. But don’t just let your coverage lapse. Here’s what you can do instead.

The Right Way to Handle Car Insurance Cancellations

In Massachusetts, a car insurance provider has the right to cancel your car insurance for lack of payment. However, they will send you a warning ahead of cancellation. Insurance providers are obligated to give you a notice 20 days in advance of the cancellation. 

This means if you fail to pay by December 1, they can send out a notice giving you until the 21st of December. Failure to pay by the 21st will mean that your policy ends and you are no longer covered. 

If you are unable to pay and wish to avoid cancellation, there are a few things you can do. They include:

  • Contacting your insurance provider
  • Asking for a negotiation to keep your policy active
  • Providing proof of why you lapsed in payment (for example, in the event of a hospital stay or a family emergency)

Often, if you talk to your insurance representative, you can get your coverage reinstated if you show good cause. Otherwise, you can appeal through the Board of Appeals. 

What If I Want to Just Cancel My Policy?

Once you receive a cancellation notice, it can be tempting to just let it happen and search for new coverage. But you should never allow your policy to lapse. There’s a right way and a wrong way to cancel a policy that you no longer want. 

  • The Right Way: If you want to improve your coverage by switching to a new company or policy, you are legally able to do it. There may be a penalty for canceling mid-policy, but it is still better to avoid the company canceling. Contact your insurance provider and explain to them why you want to cancel and ask about the penalty cost for doing so. You can also choose to cancel as your policy ends, especially if you are just changing companies. 
  • The Wrong Way: Simply allowing your insurance company to cancel your policy may come with some pretty nasty consequences. Your insurance providers are obligated to tell the Massachusetts Registry of Motor Vehicles (RMV) if your policy lapses, which could result in you losing your license. If you are caught driving without insurance coverage, you could face fines and more. It is topped off by the fact that a lapse will impact your credit rating. 

Plan Before You Cancel

Canceling a policy should never be done without thought. If you are switching companies, look at your current provider’s penalties for canceling an existing policy. You may also consider having your new insurance company talk to your current provider to resolve the issue. This will prevent cancellation penalties and ensure a gap-free transition.

If you are considering changing your insurance policy, Vargas & Vargas Insurance is here to help. You can contact us or request a free quote. 

Why You Should Update Your Policy After Improving Your Home

Posted on by cvargas
A couple looking at their newly renovated kitchen and home improvement plans
Updating your home insurance gives you better protection and can even lower your premiums!

Home improvements can change more than your home. The truth is, even a kitchen upgrade can increase your home’s efficiency, value, and more. That means you need to consider how the increase in value can impact your home insurance policy. Not considering it can make it impossible for you to get everything you deserve if you file a claim. It can also mean you pay more than you have to for insurance coverage. Why risk it?

What Home Improvements Require Changes to Home Insurance?

Let’s say that, within the past few years, you have invested money into your home to upgrade your kitchen, home office, and your roof. You may not think about them being a total cost, but each improvement adds up. It is easy to spend over $100,000 on improvements.

This amount, whether the work was done recently or over the last ten years, means that you should reconsider your insurance policy. Some improvements may increase your policy cost, but others may lower it drastically.

Improvements That Make a Difference

To help you see how certain things can raise or lower your home’s value according to your insurance, you have to look at the premium you pay. Most home improvements will lower the cost of your premium, but it is always best to be covered. Home improvements that reduce the risk of claims, for example, can lower your premium.

Improvements That Can Lower Home Insurance Premiums

  • New Roof
  • New Security System
  • Generators
  • Reducing Fire Hazards (Replacing Old Wiring or Wood Heaters)
  • Updates to Plumbing

Improvements That Can Increase Home Insurance Premiums

  • New Pool
  • Home Additions or Decks
  • Kitchen Remodels (May Raise or Lower Premiums)

This list is not all-inclusive. Your insurance company can tell you what other updates and renovations may save you money on your home insurance premium. 

Why Risk Paying More?

Many people wonder why they should pay more for homeowners insurance if they have already paid to renovate their home. The answer to this is simple. If you upgrade your kitchen with granite countertops, all new appliances, and more, what happens if a tree falls on your roof? You risk losing your improvements because nothing is documented as it should be. 

Your insurance company will only cover the cost of what your home was valued at when you purchased insurance. If you have no record of the renovations, you lose out on being able to collect money from your investment. 

With other additions, such as a pool, you may need to add insurance coverage to ensure you are not liable for accidents. This would mean the addition of umbrella insurance, but it could save you a lot of money if something unfortunate happens. 

In life, there are no guarantees. Vargas & Vargas Insurance can help you decide what type of home improvements require you to make changes to your home insurance policy. No matter how long ago or how soon you plan to remodel, we’re here to help. 

4 Reasons Your Home Insurance Premium Increases. Number 2 Will SHOCK YOU!

Posted on by cvargas

There comes that time of year when your Homeowner’s Insurance Renewal arrives in the mail.  You’re happily buzzing through your day when you read the bad news: your premium is increasing!

Panic sets in, then a fair amount of anger, and possibly a bit of anxiety. 

Whether your insurance is included in your mortgage payment through an escrow account, or you pay it separately on your own, panic sets in because you know this increase will impact your household budget. 

Anger arises due to the unfairness of this rate increase.
“How dare they!” “Why are they doing this to me?”

The anxiety is the worst part, but also the possible best part of your response to the premium increase.  Anxiety emerges because you truly don’t know why, nor do you understand, why your insurance carrier would increase your premium in such a seemingly arbitrary way.  But that same anxiety can fuel your desire to learn the answer to that question, and then to drive you forward to take action and seek a favorable resolution.

Here are 4 reasons why your Insurance Carrier might increase your Homeowner’s Insurance Premium; the second one will knock you out of your chair!

  1. Claims.  Have you had a claim in the past twelve months?  This is one of the most common reasons for a premium increase.  But this doesn’t always have to be so!  First, query your Insurance Carrier to determine if there are actions you can take to resolve the issue around the claim. For example, if the claim was due to a burglary, maybe installing a quality security system can relieve the premium-increase-pressure. If that doesn’t work, calling your Independent Insurance Agent is a great solution!  Your Agent can either advocate on your behalf with your current Insurance Carrier, or, find another Homeowner’s policy at a lower rate.
  2. Credit Score.  Insurance Carriers use a specific “Insurance Score” to predict the likelihood of a future claim.  The Insurance Score is different than your Credit Score, but uses similar methodology to create a score based on multiple data points.  Generally speaking, if you have good credit, then you’ll have a good Insurance Score.  But the Insurance Score is out of your control unlike your consumer credit score.  With a consumer score, in the event of an error on your credit report that impacts your score, Federal Regulations permit you to dispute the error and work on restoring your good score.  Your Insurance Score, on the other hand, is an unknown to the consumer.  To prevent arriving at a lower Insurance Score, monitoring and maintaining your consumer Credit Score is important.  Find out more at the Federal Trade Commission website here.
  3. Construction Costs.  Your Homeowners Insurance coverage is based on a calculation to repair or rebuild your home in the event of damage or disaster.  Therefore, the costs of materials and labor specific to your area can impact the calculation of those repair/rebuild costs.  If your local construction costs have increased due to market conditions, then it is a good likelihood your Insurance Premium can increase also.  The good news is that your Independent Insurance Agent can review your entire policy. We recommend a Twice-Yearly Review to determine if there are other areas of your policy where you can derive savings to offset any such increase in your annual premium.
  4. One of the most popular reasons for a rate increase is…..drum roll: “State Filed Rate Increase“. The insurance carrier will file a request with the state to allow for an increase on their policies that affect all policyholders. The only way around this is to call your independent insurance agent so they can shop other carriers who are competitive. Even after a filed rate increase, most insurance companies will eventually revamp their product portfolio to be more competitive. It’s basically a vicious circle.

Bottom Line: Reduce your anger, panic, and anxiety from an increase in your insurance premium by contacting your Independent Insurance Agent for the best and most expert guidance.

Contact our team at Vargas & Vargas Insurance to learn more about the benefits reviewing your insurance portfolio and what other options you have to reduce this emotional event.

Things home insurance doesn’t cover

Posted on by agentinsure

Buying a home in Dorchester, MA is something that many people aspire to. Once you have purchased your home, making sure that it is safe and protected becomes a top priority. When you have a mortgage, you are required to carry home insurance.  This may give you a false sense of security. You may think that you are protected against everything that could happen to your home. but you would be incorrect. At Vargas & Vargas Insurance we would like to talk to you about additional coverage that you may want to consider for the things that home insurance doesn’t cover. 

Flood

Floods are not covered under a typical home insurance policy. Since floods cause millions of dollars of damage every year you would think that it would be included in home coverage but you would be wrong. You need to purchase an additional policy specifically for floods in order to be protected and with the rising water around the world, more and more areas are in danger from floods. 

Earthquake/sinkholes

Earthquakes and almost any sort of earth movement ( including sinkholes and mudslides) are not typically covered on a home insurance policy. If it is something that you need coverage for, you should choose a company that offers it as additional coverage. 

Sewer backup

You may not have considered this possibility but the potential for a sewer backup doing a lot of damage to your home is always there. It doesn’t matter what type of sewer system you have, you will need to have additional coverage to be protected. 

At Vargas & Vargas Insurance we believe that having a home insurance policy offers you a lot of valuable protection but we do understand that a basic home policy does not cover everything that can happen. We would like to discuss your Dorchester, MA home insurance needs with you. Stop by our office or give us a call to set up an appointment so that we can find a policy to offer you the peace of mind you deserve.

Is Twice Yearly Too Often?

Posted on by cvargas

It’s often said that “insurance is boring.”  This notion probably leads many consumers to avoid communicating with their Independent Insurance Agent unless absolutely necessary.

Three “absolutely necessary” moments come immediately to mind:

  1. Increased Premium notification
  2. Notice to cancel
  3. A Claim

While you can only minimize your chances of ever having to make a claim on your insurance policy with smart, proactive and risk-aversion thinking, you can eliminate the first two instances of speaking with with your Agent.

The simple way to cancel out these two dreaded tasks is to speak with your Independent Insurance Agent twice a year. You might think you can cut that down to only once a year, around the time of your renewal period coming up.  But twice annually is truly the ideal scenario to deal with this otherwise “boring” task.

Checking in with your Agent in advance of renewal time allows you both to update each other on developments. 

For your part, you get to share news of:
* the new job
* the new child
* the vacation you’re planning
* the new jewelry or artwork
* the new addition to your home you’re planning. 

Your Agent may find this information fascinating and entertaining, but, more importantly your Agent can react to your news with important information on how these wonderful developments can affect your overall insurance plan.   And that call becomes worth its weight in gold.  Because your Agent can then review your current policies for how those policies cover your new life developments. 

If there are any challenges encountered therein, the kind that could affect a premium at renewal time, or worse, offer the carrier an opportunity to cancel the policy, your Agent has the chance to get out in front of the problem.

While you’re busy sharing wonderful developments, your Agent can also update you on any developments in the insurance realm that can either affect your current policies in a negative fashion (again, anticipating problems before they arise at renewal time), or potentially save you money by changing the coverages, policies, or even insurance carriers.

It’s not boring when you’re saving money and improving your insurance coverage.  Make that call to your Independent Insurance Agent. 
Twice. Every year.

Please schedule a call with us to discuss your policy portfolio to ensure you have adequate coverage at an affordable price.

Invite Your Neighbors to The Party

Posted on by cvargas

Do you know the old advice about throwing a party when you’re the new kid in town?  Yes, it’s housewarming time and you’re so happy and you invite all your friends over to celebrate.  But you don’t want to annoy your new neighbors, do you?  It’s no good getting on the bad side of your neighbors when you’re the newbie on the street/floor.

The old advice about just such a moment is to invite those very same neighbors! That’s right, don’t just invite your friends, invite the neighbors, the people who aren’t your friends.  (Hopefully some day they will be, but that’s another story altogether)

The idea behind this wisdom is that, if your party gets a little loud, your neighbors can’t possibly complain to you by banging on your door, or, worse, by calling the police.  How can they complain about your party when you invited them in the first place?  They could easily have accepted your invitation, and could just as easily be enjoying themselves with all the other revelers and getting to know you, their new neighbor too.

Take that advice a step further when you’re going to get some serious construction or landscaping work done on your home. Invite the neighbors, in a manner of speaking.  

Let’s say you hired a tree company to come in and remove several large trees.  You know the crew is going to arrive early in the morning.  And you know it’s going to get loud out there very quickly, between chainsaws, falling trees, workers yelling, and, oh, the wood chipper blasting!

Why leave it to chance that your neighbors are going to be annoyed by this early morning noise?  Let them know in advance about the work, either with a notecard you leave on their door, or a nice letter in the mail, or by knocking on the door, and introducing yourself.  You might even invite them to stop by for a cup of coffee to watch the trees come down!

There’s a lot to be said about tranquility in your neighborhood, and this is a great way to promote that, and make some new friends in the process.  So, when you’re getting major repair work or landscaping work done at your house, invite the neighbors!

When was the last time you reviewed your insurance portfolio. Please schedule a call with us to discuss your policies.

Keep Your Homeowner Policy Safe

Posted on by cvargas

Dangers are abound in even the simplest of repair situations, so steer clear of the contractor’s work zone. 

When you hire the right contractor to do repairs or renovations or maintenance at your home, you want to maintain a respectful distance from their work area.

The contractor has been trained and, through long experience, knows how to maintain a safe work zone for themselves.  When you intrude across the boundaries of that zone, you introduce an unexpected variable in the contractors work process.

And that is when it can get messy. Be prudent when you’re hiring a contractor. How?

Request evidence of insurance. 

Speaking of safety and experience, don’t forget to collect the necessary certificates of insurance from your contractors. If anything happens on your property, you don’t want to give anyone any reason to abnegate responsibility to seek remedy for their injuries under YOUR homeowners insurance policy. 

Yes, you read that right.

If your state doesn’t require Workers Compensation coverage, the Homeowners policy could apply to cover lawsuits filed by an injured worker or to pay for medical expenses incurred if they don’t file a lawsuit. 

While the work area may appear to you to be perfectly safe, it is after all, your house and you know your house better than anyone, you still cannot anticipate hazards known all too well to the contractor through their possible training and experience. 

Respect the contractors’ work zone and, if you have a coffee or other tasty treats to share, let the contractor know where you’ve placed it easily accessible in your kitchen.  Then the contractor can enter the work zone and you can be comfortable the premises are safe.

Please schedule a call with us to discuss the very complicated process of your homeowners policy being exposed compared to the contractors’ workers compensation policy.

You want to ensure that your homeowners policy is updated and accurate to protect you in the event hired workers do not provide proof of insurance.

To Escrow or Not To Escrow?

Posted on by cvargas

Many Homeowners have an escrow account for their mortgage payment. The purpose of the escrow account is to maintain a balance of funds the mortgage lender uses to pay bills on behalf of the Homeowner such as property taxes and insurance.

Many other Homeowners do not have an escrow account, even if they have a mortgage; they pay their own taxes and insurance directly.

Not every mortgage program requires that a Homeowner maintain an escrow account.  The general rules are the following for an escrow requirement:

  • Down payment less than 25% at time of purchase
  • Government Insured mortgage (FHA, VA), regardless of down payment at time of purchase

If your mortgage is not a Government-insured mortgage, and your down payment is less than 25% you still have the option to request a “waiver” of the escrow account requirement. Sometimes a lender will charge a premium—usually in the points paid—to waive the escrow requirement.

There is one primary benefit to having your property taxes and insurance included in an escrow account.  This is the monthly budgeting benefit.  Since the taxes and insurance escrow is included in your mortgage payment, then the mortgage payment is the only budget item you need to plan for.  

But there’s an important negative aspect to an escrow account.  The “set it and forget it” mentality that can easily set in.  That is, since your Homeowner’s insurance is included in your mortgage, many Homeowners not only forget to review their insurance on an annual basis to determine savings on premiums, but these same Homeowners often have no idea of the amount of their annual insurance premium, including when the premium increases.

If you have the opportunity to remove at least your Homeowners Insurance from your escrow account, you should do so.  This control allows you to discuss your insurance twice every year with your Independent Insurance Agent to lower your premiums and to take advantage of any developments that can improve the quality of your insurance coverage. 

The process to remove your Homeowners Insurance from your escrow account can be difficult but is worth the effort.  Contact your mortgage servicing lender today to find out if this option is available to you.

Lower Mills Holiday

Posted on by cvargas