Insurance Coverage: Are Maintenance Costs Covered?

Posted on December 16, 2022April 5, 2023 by cvargas

Taking care of your property is nothing short of improving your investment. And although homeowner’s insurance can help recover in some cases, it doesn’t cover a lot of maintenance costs.

This is especially true if damages are the direct result of being neglectful. These are just some of the costs that might come out of your pocket.

Termites and Other Insects

Although you may find your home tranquil, there are a lot of insects that might find it tasty. Termites and other insects can quickly turn your home into a sanctuary.

In some instances, insurance policies do not cover the damages created by these bugs, including pest control or home-cleaning services.

This often includes insects such as termites, cockroaches, ants, spiders, and a whole host of pests that tend to invade your privacy. If you see any of these bugs on your property, there’s a good chance they’re also in your home.

Bird, Rodent, and Animal Damage

Another of the most common damages from nature comes in the form of birds and rodents just looking for a place to live. Unfortunately, they will tear apart your home from the inside.

In fact, a lot of people don’t even know there is a critter problem until something like a leaky ceiling or various smells start emanating from the walls.

It’s not just the little ones that can wreak havoc, either. Raccoons are well-known for utilizing roofing materials for both houses and garages to create nests.

Rust, Rot, and Mold

A small leak in your roof created during the winter can lead to costly repairs in the summer. Rust, rot, and mold are common results of neglecting the property. And not all insurance policies will cover the repairs.

For example, let’s say that you neglected to notice that leak in the roof. Over time, the water invading your home can lead to rotting out the drywall as well as propagating mold within the walls.

In this case, your insurance coverage might not cover the maintenance costs and repairs that will accumulate.

General Wear and Tear

Perhaps one of the most obvious elements of being a homeowner is repairing the general wear and tear of the property. This can include everything from replacing an old carpet to buying a new air conditioning unit.

While insurance coverage might not reimburse you for most of these expenses, you might still qualify for discounts. That is if you upgrade the home with preventive appliances, such as fire alarms or anti-theft devices.

To find out more about what discounts you qualify for as a homeowner, be sure to contact your policyholder.

Your Insurance Policy Might Not Cover Maintenance Costs

Although every insurer is different, many won’t cover repairs and other costs related to the upkeep of your home. Instead, those expenses will come out of your pocket.

This is why it’s vital to perform routine maintenance on your property. Even the slightest leaky pipe under the sink can lead to severe and costly water damage.

Preventative maintenance is crucial for keeping your home safe and secure.

At Vargas & Vargas Insurance, we strive to help people understand their policies while finding the best deals for their needs. Contact us today to find out how we can help you keep your home protected.

Always remember, an ounce of prevention is worth a pound of the cure.

Insurance Coverage: What Happens During a Flood?

Posted on December 14, 2022April 5, 2023 by cvargas

Your home insurance policy doesn’t provide a blanket of protection from everything. For example, you might not have coverage if a flood causes water damage to your property. But that also depends on the type of flood and what was damaged.

Today, let’s take a quick look at flooding and what you can do to protect yourself.

What kind of Flooding Isn’t Often Covered?

Although home insurance can help with some costs caused by flooding, there are quite a few that may not be in your policy. This may include:

Natural disasters, such as extreme rain or snow.
External sewage line breaks or backups.
Sump pump flooding.

However, your policy might include coverage in the event of damages from broken pipes inside the home, flooding from a bad water heater, or if a fire was the result of various types of water damage.

Generally speaking, a “flood” is considered any excess water on the property that is normally dry. If a sewage backup is caused by flooding, and you have a sewer backup endorsement on your policy, that is covered by insurance.

Of course, you review your policy with your local independent insurance agent or review your policy.

What Affects Flood Coverage Policy Costs?

Like any other type of insurance, the costs of flood coverage depend on a wide range of factors. This is why people will often pay different premiums even though they live in the same city.

Some of them include:

Risk of Flooding
If your home is in a location that is prone to floods, your policy could increase.

Your Deductible
A higher deductible of the coverage will reduce your monthly premiums.

Property Location
The neighborhood of your home could affect the cost aside from the flood risk.

Age of the Property
As older homes are more prone to needing repairs, their age could increase the cost of a flood policy.

Itemized Schedules
Not everything is covered in the home through flood insurance. Valuables such as jewelry and antiques may need to be scheduled separately.

How to Get Coverage in Case of a Flood

If flooding is a concern, you need to contact your insurance agent to buy a new policy. You can also renew an existing policy to include flood coverage.

The average premium in the United States is around $750. But this can be higher or lower depending on where you live. This is especially true if you live in a location that is prone to some kind of flooding.

At its average cost, flood coverage is only an extra $62.50 per month. Considering the sheer amount of damage water can do to a home, this is not that bad of an expense to protect your family and property.

Water Damage Can Be Devastating

The important thing is to have the flooding repaired immediately. Even the slightest trickle within the walls can result in mold growth, extreme drywall damage, and compromise the framework of your home.

At Vargas & Vargas Insurance, we can help ensure that your policy includes covering floods and other types of water damage. If this is a concern for you, contact us today to see how we can help.

You don’t have to face water damage and flooding on your own if you have proper coverage.

6 Things Car Insurance Doesn’t Cover in Most Cases

Posted on December 5, 2022April 5, 2023 by cvargas

Not only is car insurance a safety net in the event of certain damages, but it’s also a legal obligation. And although your insurance may cover a lot of things, there are some that are just not part of most policies.

So, what kinds of things are not covered by your automobile insurance?

1. Custom Modifications or Upgrades

Most basic policies don’t cover modifications or aftermarket upgrades and parts. And those that do offer coverage often have a cap of $1000 or so.

This means you’ll have to pay out of pocket if your expensive rims are stolen or damaged. This doesn’t include any deductibles you might have in such an instance.

2. Damages Beyond Policy Limits

A collision policy will only cover a certain amount of damages should something happen. In some cases, you might be covered for up to $50,000 in damages.

But what if you smash your car into a brand-new Bugatti? Well, you’ll be paying out of pocket for that particular automobile for years to come.

My point is that damages beyond what your car insurance can cover will be your responsibility.

3. Car Insurance Doesn’t Cover Racing

A lot of people feel the pressure of demonstrating their wheels are superior. This often results in a quick race down some street or boulevard as an exhibition of speed.

Yet, should an accident happen while you’re speeding down the road, most policy claims will be denied.

4. Rideshare and Delivery Businesses

Uber and Lyft are two of the most popular rideshare businesses nowadays. Even delivery service jobs are available from your automobile. But what happens if you accidentally run a red light and T-bone another vehicle?

Most insurance policies will not cover damages caused while running rideshare and delivery businesses from your car.

5. Theft of Property Left in the Car

You probably know a lot of people who keep their wallets in the glove box or middle console. Perhaps you have a golden locket hanging from a rearview mirror.

In the event of these items being stolen, policies will often deny claims of theft. However, your homeowners’ or renters’ policy might. Be sure to check there, first.

6. Drug Testing Your Car?

As absurd as it may sound, drug testing a vehicle is a real thing. This is when a drug kit is used to ensure dangerous substances are not present when dealerships or specialists repair damages. And the process can add a week or two to repair times.

Though, this is usually done in the event of a theft and recovery of a vehicle.

This is driven by recent events involving fentanyl exposure.

However, most insurers have no problem covering costs such as testing or cleaning after a theft or an attempted theft. If there was no evidence to raise a drug-related concern, though, some insurers may not volunteer to pay for contamination testing or clean-up.

The fact of the matter is that this instance is exceptionally rare.

Car Insurance is Still a Necessity

While there may be a few things not covered in your policy, it’s still worthwhile to protect yourself. Accidents happen all the time, whether they’re through the fault of your own or not. The last thing you want is to be on the hook for repairs or get a ticket for not having coverage.

At Vargas & Vargas insurance, we’ll help you find the best policy for your car insurance. Contact us today to see how we can help deliver coverage for your automobile.

While it may be difficult to cover any of the above, you can still rest easy knowing that you’re protected in various other life situations.

Why Do Insurance Rates Increase Over Time?

Posted on November 29, 2022December 10, 2022 by cvargas

As with anything else, insurance rates increase as time marches on. In fact, rates are often affected just as much by inflation as anything else you might buy.

Unfortunately, this means that the cost of premiums and policies will continue to rise. How much these rates increase depends on circumstances ranging from neighborhood growth to the world stage.

Replacement Cost Affects Insurance Rates

The first thing that you should consider is how replacement costs work. This is much different than the purchase price of your home or auto.

The replacement cost includes materials needed to “replace” the property, the cost of labor, and other elements to make it whole. If the cost of wood goes up, so will the replacement cost.

If your policy was frozen at the replacement costs from 20 years ago, it would be short. The end result is the costs coming out of your pocket.

As you can see, this kind of increase is good as it reduces how much you’ll have to pay in the event of an emergency, I recorded talking about replacement cost versus purchase or market value on your home, click here to watch the video.

Home and Auto Rates are Similar

Houses are not the only types of property that may have an increase. Insurance rates for automobiles go up as well.

In order for an auto to become “whole,” you’ll need the cost of materials and labor. Nowadays, this can also include a variety of technological advancements, such as rear cameras, sensors, and the wiring to make it all work.

In some cases, insurers will also consider things like the cost of medical bills when making adjustments. So, if the cost of medical care goes up, so do insurance rates.

Like ripples in a pond, anything affecting specific industries will take a toll on many. For example, the cost of computer chips will impact the cost of replacing the cameras I mentioned earlier.

What Can You Do to Lower Insurance Rates?

Depending on the type of property, there are quite a few methods at your disposal to reduce rates. The first thing you should do is ensure your policy is correct. If you’re paying for something you don’t need or have scheduled, it’s a waste of money.

A few other ways to decrease insurance rates include:

Preventative measures. Fire alarms, anti-theft devices, safety features, and other preventative add-ons often work to reduce home and auto insurance premiums.
Keeping claims to a minimum. The more often you have to file a claim, whether it’s for the home or auto, the more you’ll pay. This is because insurance providers will see you as a high-risk factor.
Shopping around. You can always look around for a lower-cost insurer. However, keep in mind that low cost doesn’t mean superior service.

Insurance Rates Are Part of the Cost of Living

Sure, insurance companies need to make money. Otherwise, they would be out of business. However, not all increases in insurance are the result of greedy CEOs or banks.

Sometimes, increases are simply the result of an increase in the cost of wood or other materials.

At Vargas & Vargas Insurance, we can help you find affordable rates and plans throughout our network. Contact us today to see how we can help you save money on home and auto coverage.

After all, we may help you keep more money in your pocket to cover the other cost-of-living expenses.

Home Insurance FAQ: Purchase Price vs Replacement Cost pt 2

Posted on November 14, 2022November 11, 2022 by cvargas

In a previous article, we covered a couple of the most common home insurance questions when it comes to the purchase price and replacement cost. Today, we’re going to dive a bit deeper to answer a few more questions when it comes to these two elements.

It is our goal to help you further understand your home insurance policies, which could save you a lot of miscommunications down the road.

Is the Purchase Price and Replacement Cost the Same Thing?

The purchase price of your home depends on several factors. These often include values such as location, age, amenities, and other things that increase its “curb appeal.” However, replacement cost is based on how much it will cost to replace something after damages occur.

Replacement costs can vary depending on current market values. For instance, if the cost of lumber increases, as it did at the beginning of 2022, it would directly impact how much it would cost to rebuild a part of the home.

Can a Replacement Cost Be Higher Than the Purchase Price?

The current market influences the value of any home. If the market is particularly low, it is possible for replacement costs to surpass a home’s value.

This is especially true if the replacement materials are at an all-time premium.

In fact, there are a lot of things that can decrease the value of a home. This could include the safety of the neighborhood, previously sustained damages or even unkempt or dangerous landscaping.

What is the 80/20 Rule for Insuring a Home?

The 80/20 rule often refers to insuring your home for a minimum of 80% of the replacement costs. This doesn’t necessarily mean 20% will come out of your pocket during a claim, though.

In practice, a lot of insurance providers will pay out a claim in full if you maintain the 80% coverage.

Remember, the purchase price has no influence on replacement cost. This means you wouldn’t insure the home for 80% of what you’re paying for it.

When the insurance you carry is lower than 80% of the replacement cost of your home, you are penalized when you have a partial loss, call us, and we can explain further based on your particular circumstances.

Do Insurance Companies Pay the Replacement Value of Items in the Home?

In certain policies, items within the home have coverage in the event of theft, damage, or if destroyed. This is known as the Replacement Cost Value, or RCV. And in some cases, this only applies to objects scheduled in the policy itself.

In this instance, insurers pay the current market value of replacing the item.

For example, technology usually depreciates rapidly. The replacement cost of something like a television or computer is often much lower than the original price.

Know Your Home Insurance Terms

Purchase price and replacement cost are only a couple of home insurance terms you need to know. And the more you understand what’s in your policy, the better prepared you are in the event of an emergency.

At Vargas & Vargas Insurance, we can help you gain some clarity when it comes to your policy. Contact us today and find out how we can further help you with home insurance.

Don’t let a misunderstanding hinder your ability to process a claim.

Home Loan Advisor or Lender First: Which Is Better?

Posted on November 7, 2022November 1, 2022 by cvargas

Buying a property is an exciting process. Especially when you’re looking for that one perfect place to call home for the foreseeable future. But have you spoken with a home loan advisor? Or, did you immediately contact a lender to figure out what you could afford?

A lot of people will go with the latter as it provides a cap on what to expect. However, doing so might actually limit yourself beyond what is necessary.

What is a Home Loan Advisor?

A home loan advisor’s job is to help you figure out lending solutions based on your financial situation. Typically, the loan advisor works with credit unions and banks while having expertise in the products and services that are offered.

Essentially, they’ll walk you through the entire process from the initial application to the moment you close on a home. This gives you a bit of flexibility while potentially expanding the list of properties available to you.

How Small Credit Changes Can Affect Everything

For most people, it can take weeks if not months to find that perfect home. And if your lender ran a credit check at the beginning, you’re essentially locked at a specific loan amount.

During that time, you could be working on your credit score. Perhaps you made an extra payment towards something that will raise your score to a higher tier.

Unfortunately, this increase won’t be applicable as the lender already approved a specific amount for the loan. Or, it could take a couple of months before the credit score increases from those adjustments.

Speaking with a home loan advisor first can help you figure out the best course of action to take when it comes to your credit score. This includes any positive elements that may be pending.

It could directly affect your interest rates.

Available Down Payment

For the most part, people assume they need at least 20% of the home’s price as a down payment. So, for a house listed at $270,000, you’d need $54,000 upfront. That is if the property doesn’t qualify for things like VA or USDA loans, which often allow for purchases without down payments.

In reality, though, that down payment could be much lower depending on your financial status and the type of loan. A home loan advisor can examine your situation and find alternatives when it comes to how much you need as a down payment.

This means you might have a bit more flexibility when it comes to the amount of money you’ll need if you’re offer is accepted on a property.

Speak with a Home Loan Advisor Today

While you could still buy your house without assistance from a home loan advisor, you may have paid more than what was necessary upfront. Not to mention undercutting what you may have qualified for, in the first place.

At Vargas & Vargas Insurance, we work with the best of the best of qualified professionals to cover various home-buying needs. Contact us today so we can get you in touch with a home loan advisor that will have your best interest at heart.

It could save you an incredible amount of stress while buying your home.

Home Insurance Terms You Need to Know Going Forward

Posted on October 31, 2022October 21, 2022 by cvargas

Understanding the terms of your home insurance policy can alleviate a lot of confusion and problems down the road. It’s not simply a form full of non-sensical legal jargon; it’s the plan to keep your home and family safe from financial ruin.

Today, let’s take a look at those terms and clear some of the confusion.

General Home Insurance Terms

While a lot of insurance plans are unique to certain vendors, there are terms that are usually universal. So, no matter who is holding your policy, this list will still be of great benefit.

Declarations Page

The Declarations page is essentially a quick overview of the policy details. It delivers fundamental information such as:

Your basic info
Name and address of the insurance company
Coverage dates
Basic outline of coverages
Deductibles
Premium
and other basic interests

Essentially, this page is the “proof of insurance” when a mortgage company asks.

Insured/Insurer

The Insured party is the individual for which the coverage is being provided. This is typically the home or property owner.

An insurer is the insurance company providing that coverage.

Additional Insured

The Additional Insured party is anyone other that the homeowner who has a vested interest in the property. This is often the mortgage company if applicable.

Also, this party can be a payee for larger claim payouts in the event of something major. For example, if a hurricane disintegrates half of your home, the mortgage company may receive the funds.

Policy Period

The Policy Period is the calendar date when the insurance is active. This is often processed annually, but some policies may be month-to-month.

Premium

Now, the Premium is how much your insurance costs every 12 months. This is not to be confused with a monthly payment, which is a considerably different amount.

However, the premium can be broken up into monthly, quarterly, and semi-annually payments to make it more immediately affordable.

Usually, homeowners will pay the amounts directly to the insurer through a mortgage escrow account.

Deductible

One of the more important home insurance terms to know is the Deductible. This is the amount a claim has to reach before the insurer bears any financial responsibility.

For instance, if you have a deductible of $500, but the damage repair or placement cost is only $450, the insurer doesn’t have to pay and it will come out of your pocket.

Of course, this is just an example. Every insurance company has its own levels for deductibles, and the higher the deductible, the less your annual premium you pay.

All-Risk/Named-Peril

An All-Risk policy will cover all potential losses other than specific exclusions of the policy. These are not very common as they are more expensive. However, they tend to be far more inclusive.

The Named-Peril policy covers causes of loss specific to the policy and nothing else. For instance, an insurance policy for the midwest may include tornado damage as it is a common risk for the property. However, it may not include earthquake coverage should one happen.

Replacement Cost Value / Actual Cash Value

Replacement cost and actual cash values are very different, especially when considering coverage and when filing insurance claims.

The Actual Cash Value, or ACV, is the cost to fix your home minus its decrease in market value due to age, location, and other environmental factors.

The Replacement Cost Value, or RCV, is the cost to replace or repair elements of the home or property according to today’s prices.

Other Valuables Not Included

Did you know that not all of your valuables may be covered by your home insurance policies? Things like jewelry, guns, cash, and antiques are not often covered unless you schedule them specifically on your policy.

Don’t leave anything to chance. Take a look at your policy and talk with an agent today to identify things of value in your home that are not currently covered.

Knowing Home Insurance Terms is Vital

Knowing how to read your home insurance policy is an essential facet of life, and understanding the terms is an excellent first step. It can help reduce a lot of confusion in the event of an emergency.

Not to mention making sure certain things in the home are covered.

At Vargas & Vargas Insurance, we’ll help you understand the details and terms of your home insurance policy. Contact us today and let us provide assistance that will give you peace of mind.

What is Inherent Diminished Value and How it Affects an Auto Accident?

Posted on October 24, 2022October 17, 2022 by cvargas

It’s quite common for some pieces of personal property to diminish in value almost immediately. For example, a computer could lose a great deal of its replacement value within days because of the ever-changing nature of technology and its use. But how does Inherent Diminished Value work for a car?

This depends on the state in which you live. But in Massachusetts, IDV is an established precedent.

What is Inherent Diminished Value?

Inherent Diminished Value, or IDV, is when a vehicle loses value due to damages caused by a no-fault accident. This is when there is a collision through no fault of your own.

As some damage is prevalent even after repairs, courts have ruled that IDV claims can help the owner be “made whole.”

These are usually filed as third-party claims. That’s because you’ll contact the at-fault party’s insurance company.

An example of this is when an accident occurs through no fault of your own that causes structural damage to the vehicle’s framework. Although repairs can be made to allow the vehicle continued use on the road, the frame itself could be altered in a way that disrupts usage as intended.

If the vehicle has less than 20,000 miles on the odometer after suffering severe structural damage, this could result in an IDV claim of roughly 10% of the vehicle’s value.

Is There a Difference in Depreciation vs Inherent Diminished Value?

Depreciation is when the value of the vehicle decreases over time due to normal wear and tear. In fact, most pieces of property will depreciate over time except for housing.

A well-maintained home will actually appreciate over the years, which is why homeownership is a great investment.

So, a vehicle with 200,000 miles will depreciate quite a bit because it has been extensively used. Even after installing a new motor, the vehicle will never be at its original MSRP.

Inherent Diminished Value, on the other hand, happens immediately upon an accident. This is why the IDV claim is much more for a new vehicle vs an older one. It hasn’t had nearly as much wear and tear.

How to Calculate Inherent Diminished Value

Let’s take a look at the calculations to establish IDV. For this example, let’s say I have a 1990 Dodge Daytona ES with 82,399 miles.

1. Establish the Car’s Value

The first thing we’ll do is estimate the vehicle’s value. This gives us a base amount. A commonly used website for finding vehicle value is the National Automobile Dealers Association, or NADA.

In my example, the value of a 1990 Dodge Daytona ES is $11,000.

2. Calculate the Value’s Base Loss

In many instances, the insurance company will calculate the base loss at a maximum of 10%. This means my Daytona’s base loss is $1,100 (11,000 x .10)

3. Use the Multiplier for Damages

Use the multiplier from the numbers below:

1.00 = Severe structural damage
0.75 = Major damage to structure and panels
0.50 = Moderate damage to structure and panels
0.25 = Minor damage to structure and panels
0.00 = No structural damage or replaced panels

Let’s say my car was in an accident that severely altered the frame of the vehicle. I would use the “1.00” multiplier. So, my IDV is still at $1,100 (1100 x 1.00).

4. Use the Multiplier for Mileage

Remember when I told you about the “depreciation” of an automobile? It’ll actually play a role in the Inherent Diminished Value of your car.

Use the mileage multipliers below:

1.00 = 0 < 20,000 miles
0.80 = 20,000 – 39,999 miles
0.60 = 40,000 – 59,999 miles
0.40 = 60,000 – 79,999 miles
0.20 = 80,000 – 99,999 miles
0.00 = 100,000+ miles

For example, let’s now say that my vehicle had only 82,399 miles on the odometer at the time of the accident. I would use the “0.20” multiplier. As a result, my IDV would decrease further to $220 because of the mileage (1100 x 0.20).

Any vehicle that has over 100,000 miles may not qualify for an IDV claim.

When Should You File a Diminished Value Claim?

For the most part, the Inherent Diminished Value triggers when you are involved in an accident through no fault of your own. This means you’re most likely to file a claim against the at-fault driver’s insurance company.

If you’re involved in a hit-and-run, or if the at-fault driver is uninsured, you may be able to file a claim against your own insurance company. This is because there is no other insurer involved.

File your IDV claim as soon as possible. Some areas may have a statute of limitations or your vehicle could further decrease in value as time marches on. In any case, make sure you have supporting documentation.

What Kind of Coverage Do You Have?

Although your insurance may cover a great deal of damage, you may also receive additional restitution due to Inherent Diminished Value.

At Vargas & Vargas Insurance, we help our clients get what they need and deserve. Contact us today to find out more about how we can help keep your automobile covered.

Not all repairs can completely restore a vehicle back to its original functionality. Can compensation help you in such a situation?

Do You Have the Right Small Business Coverage?

Posted on October 17, 2022October 15, 2022 by cvargas

Starting a small business is exciting, especially if you come up with something that takes off quickly. In the hustle of getting everything put together, how much time did you spend considering insurance coverage for your small business?

Sure, you may have property insurance in the event of a fire or other natural disaster. But what about things that property insurance doesn’t cover?

Liability insurance can only go so far as to keep your business protected.

What Kind of Small Business Coverage Do You Need?

General Liability insurance is better than nothing at all. But you might want to consider expanding it with an Umbrella policy or extending it to cover any of the following.

Commercial Auto Insurance

Does your small business have a car of its own? There’s a big difference between commercial and personal coverage. For instance, commercial coverage supports you and any employees driving company vehicles.

Commercial Property Insurance

In many cases, commercial property insurance covers tools, equipment, inventory, and any furniture needed by the business. In the event of a fire or flood, this plan can help replace those things you need for operation.

Workers’ Compensation

Workers’ compensation is to help alleviate the financial burden of employees who become sick or injured while on the clock. This type of insurance plan covers things like death benefits, lost wages, and various disabilities that result from those instances.

Professional Liability Insurance

While mistakes and accidents do happen, they could result in a lawsuit against your company. Professional liability covers much of the litigation process in such cases.

Data Breach Coverage

Due to the nature of the Internet, protecting data is a constant battle. But do you have coverage in the event of a data breach? This type of insurance can help with various expenses. For instance, it can help with notifying customers impacted by the breach, hiring PR firms to help with negative press, or even credit services to help breach victims.

What About Home-Based Small Business Insurance?

A growing number of people are working to build a home-based business today. Even if you’re simply a freelancer working from home, having the right insurance plans can give you peace of mind.

Now, homeowner’s insurance can cover quite a bit when it comes to business property, such as computers. But what about other things such as employee injuries, data loss, or lawsuits?

Do you have property, inventory, or supplies that are relevant to your small business practices?

Take a few moments and really process what your home-based business needs to function and ensure your current insurance plans cover all the bases.

Choose the Right Coverage for Your Business Needs

Protecting your assets is of utmost importance if you want to build a successful business. One simple happenstance could quickly turn into a financial nightmare.

At Vargas & Vargas Insurance, we do what we can to ensure your small business needs are covered. Contact us today to find out how we can help protect your livelihood from suffering heavy losses in the event something happens.

All it takes is one storm, accident, or natural disaster to decimate what you’ve worked so hard to build.

Does a Lapse in Car Insurance Affect Your Rates?

Posted on October 10, 2022September 21, 2022 by cvargas

Among the best ways to save money on auto policies is to make sure you don’t have a lapse in car insurance coverage. This is when, for whatever reason, you stop payments on your policy for your automobile.

While it may save you a few dollars this month, it’ll come back to haunt you later on, especially in the event of an accident.

In reality, the only lapse in auto coverage you should ever have is when you have no vehicle to drive. You can’t really put insurance on something that doesn’t exist. Though, it’s probably a good idea to get non-owner car insurance if you plan on borrowing or driving someone else’s vehicle.

How a Lapse in Car Insurance Affects Your Rates

Typically, the effects on your rates depend on the amount of time that has lapsed. In many cases, there is an 8% increase if you haven’t had insurance within 30 days. Afterward, it could get much higher ranging up to 35% for a lapse of 31 days or more.

For an annual policy, this could result in paying hundreds of dollars more than what you would have paid. This is why it’s important to get back onto an insurance policy as soon as your old plan expires.

And that’s if you’re not a high-risk driver. The amount you pay could be significantly higher.

Now, this is an estimation as every insurer will have its own policies and penalties. But you can bet that any lapse will result in some sort of higher premium.

What to Do if You Have a Lapse in Car Insurance

Not all lapses in coverage are on purpose. Sometimes people forget to pay their premiums. Or, maybe something else caused the insurer to drop your plan.

In any case, it’s a necessity to get coverage as soon as possible if you continue to drive.

A few things you can do include:

Have your local independent insurance agent ask your insurer for a reinstatement. In some cases, your agent may be able to work with you to reinstate your policy with minimal penalties if done quickly enough.
Have your insurance agent shop around to see how much of a penalty you’ll have to pay for coverage. Perhaps they can find an insurance comoany that is cheaper overall.
Refrain from driving until you’re properly covered. Even if you don’t get into an accident, you can still get a ticket or a potential court appearance should you get pulled over by an office for any other reason.

License, registration, and proof of insurance…

Don’t Forget to Seek Discounts

Some insurers will still allow you to qualify for certain discounts to offset penalties from a lapse of car insurance. This could include things like a good driver’s discount, low mileage use, combining policies such as including homeowner’s insurance, anti-theft devices, defensive driving courses, and more.

Ask your provider what discounts you qualify for even with the lapse in coverage. It could help reduce your monthly payments after a lapse.

It’s Best to ALWAYS Have the Auto Covered

A lapse in car insurance can happen for a myriad of reasons. And many of them might not even be your fault. However, you’ll still feel the brunt of a lapse if you take too long to rectify the situation.

At Vargas & Vargas Insurance, we work with many national insurance companies and may be able to help you find car insurance policies that are affordable even after an extended lapse. Contact us today to find out how we can help you get back on the road.

After all, the sooner your car is covered, the cheaper it’ll be in the long run.

Vargas & Vargas Insurance

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