Downsizing to a Condo vs. a Smaller House

older couple downsizing to a condo

There are different financial and practical reasons to downsize to either a small house or to a condo. The reasons for downsizing are all good, provided you are ready to move to your new community and the finances work in your favor.

Before you decide to downsize to a smaller house or a condo, you need to:

  • Assess your needs
  • Decide where you would like to live
  • Price it out
  • Realize that a smaller space is not necessarily cheaper
  • Avoid underestimating your emotional considerations

Benefits of Downsizing

Downsizing to either a condo or a smaller house has its considerations and potential drawbacks, and it is vital to learn more before making an offer. Moving to a condo or a smaller house is not only for singles or couples. It’s even for large families interested in changing their lifestyles.

Downsizing to both a small house and a condo means owning less, which can make you happier. Having a few things and fewer rooms reduces your chore time. This leaves you more time to take part in activities that can enrich your life.

Unique Considerations of Downsizing to a Condo

Condo living also gives you the luxury of less maintenance. You will not have to spend your time doing gardening related chores, such as mowing the lawn. While every condo community is different, most of them have an extensive list of amenities compared to small house communities.

Condo communities are characterized by the proximity of the quarters to each other. When you live in such close quarters, you enjoy a sense of community that is different from what you will find in a typical neighborhood of small houses. Taking great pride in your community makes it easier for you and your neighbors to become friends.

Downsizing to a condo can be more expensive compared to moving to a smaller house. Considerations of location and convenience might increase your payment for a condo.

If you have questions on how to start the downsizing process, Vargas & Vargas Insurance can guide you through the process and get it done for you. You can depend on our expertise for your insurance needs and referral to experts in your local area. 

How to Shop for Condo Insurance If You’ve Only Owned a House

couple shopping for condo insurance in their new home

Condo owners independently own their individual units (though there is common ownership of the common areas), and that means you need to protect it. If you are looking for coverage for your condo, it is essential to understand the different aspects of insuring a condo compared to a home.

What Do You Need to Know Before You Start Condo Insurance Shopping?

When shopping for condo insurance, it is important to be aware that the primary dwelling is protected under the condominium association’s Master Policy. Your condo community may provide all-in coverage or less inclusive insurance like single entity coverage Additional structures do not apply to a condo and are not included in the coverage. When you pay for your condo association’s fees, personal property protection is not covered by the policy. Therefore, it is crucial to consider this when looking for condo insurance.

Aspects of loss of use, medical payments, and personality liability are the same for both condos and homes. Therefore, when shopping for insurance for your condo, it is vital to ensure that you obtain a policy with high-level protection for personal property. This is because your condominium association’s primary dwelling coverage only covers the structure and does not include your belongings inside the walls.

Typical condo insurance covers:

  • Vandalism
  • Fire and smoke
  • Burst pipe
  • Theft

Factors to Consider While You Look for Condo Insurance

When shopping for condo insurance, you need to consider the cost. The cost of standard condo insurance depends on different factors, including:

  • The amount of deductible
  • Your coverage options
  • Aspects covered by your condo association’s insurance
  • Materials used in the construction of the condo
  • Location of the condo

It is essential to review the master policy of your condo association before deciding the amount of your condo insurance. This is because, in some instances, some insurance policies do not cover anything inside the walls of your condo. In such a case, you need to include more items when calculating your insurance coverage.

It is not easy to make general recommendations about condo insurance due to variations in state laws and condominium association bylaws. Consider working with local independent insurance agencies because of their business relations with financially robust insurance entities. Also, local insurance agencies can tailor your policy to meet your specific needs. 

For more assistance choosing the right condominium insurance for you and your family, contact Vargas & Vargas Insurance today. We’re here to help.

How to Know If You Are Financially Ready to Buy a Condo

couple with a young child analyzing their finances before buying a condo

Besides the convenience that accompanies owning a condo, who wouldn’t appreciate the freedom from the hustle and bustle of having to take care of the land while getting to have a roof over your head? However, just because buying a condo suits your needs, and you feel the need to buy one, it does not mean you are ready to own one.  Here are pertinent questions whose answers will help you find out whether you are really prepared to buy that desired condominium:

1. Can You Afford the Down Payment?

Whether you have sufficient cash to pay off for that condo or not is important, but it’s not the only cost to consider. A good down payment amount is a must-have. You are in an excellent position to go ahead and take the leap towards owning your dream condo only if your savings match the down payment requirements that accompany the property you have in mind.

2. Are You Managing Your Debt Well?

Second on the financial checklist that determines your readiness for buying a condo is how debt-free you are. Debts will certainly put constraints on your desire to acquire that condo you crave. You will want to ensure all impending bills and maxed credit cards are brought under control to free up more income that is needed for buying your condo.

3. Are You in a Position to Handle Hidden or Unforeseen Costs?

Before engaging the seller of the property, ensure you have set aside some money for unforeseen costs and any other unconsidered charges that will arise before closing the deal. For instance, many sellers throw all kinds of fees at you. These fees might range from recording fees and underwriting fees to the appraisal fees. There is also the hurdle of moving costs and money for decorating and furnishing the new condo in line with your tastes. Also, you may need to pay property taxes upfront.

4. Have You Considered the Cost of Purchasing a Condo Insurance Policy?

When looking to buy a condo, the last thing you would want is to risk any insurable outcome forcing your hard-earned investment down the drain. From the onset, you will then need to know from who and where you can shop around for a reliable and affordable condo insurance policy.

Condo insurance saves your money in case of any accidents and incidents in your condominium. For instance, without condo building insurance, you may not be able to replace your custom cabinets or fittings in the event of a fire. To avoid losses in terms of money or property, purchase proper condo insurance and protect yourself.

If you answered yes to these questions, step out of that bubble of uncertainty and get ready to buy that desired condo. Want to learn more about the condo insurance policy that suits you best from someone you can trust? Contact Vargas & Vargas Insurance for help with all the condo insurance concerns you might have.

Condo Owners Need More Coverage Than the Master Policy

Although most new condo owners are added to the property’s master policy upon purchase of the unit, the claim that this policy is all owners need is misleading. You may have been told that your unit’s coverage under the master policy prevents you from having to purchase separate coverage, but the policy is only meant to protect the property, not your personal possessions. If your condo is only covered under the master policy, now is a good time to purchase additional coverage that meets your needs. 

couple researching condo insurance as they move into a new condo

What Is a Master Policy? 

A master policy is the most basic type of insurance used by condo owners. It typically covers damage to the building itself, as well as common areas and liability for the condominium association. However, unlike other policies, your master policy does not cover your belongings or personal liability. The master policy provides the necessary protection for your condominium association. But only being covered under the master policy is not sufficient to protect yourself. 

How Should I Cover My Condo?

Every condo owner’s coverage should be comprised of both the master policy and individual condo insurance. Condo insurance is similar to regular homeowners insurance, but it is designed to meet the unique needs of shared property ownership. It covers owners’ belongings and personal liability, as well as additional coverage for the building itself. Upgraded features may also be covered only by condo insurance, as many master policies only cover standard features.    

What Happens If a Claim Is Made?

If a claim is made for something that happens within your unit, you will generally be defended by your private insurance company, not the master policy. Your insurance company will cover the necessary funds, minus the deductible. If you are only covered by the master policy, you will likely be responsible for the claim.  

Your master policy should work together with private condo insurance to provide the best possible protection, rather than being considered the only insurance you need. In order to adequately protect yourself and your belongings, select a condo insurance policy that effectively fills in the gaps of your master policy.  At Vargas & Vargas Insurance, we’re here to help you find the right coverage.

How Much Condo Insurance Do You Need?

In order to determine how much condo insurance you need in Dorchester MA, you should plan to look at your condo’s association master policy.

How Much Dwelling Coverage Do You Need?

There are two types of master policies that affect how much dwelling coverage you need. All-inclusive means that the policy insures the exterior and interior surfaces of the unit and you would just need to worry about the stuff you own. Fixtures attached to the wall, such as the shower, cupboards, and toilets, also fall under this master policy. However, improvements are considered a gray area. A bare wall in policy means that everything inside the condo’s four walls needs insurance. This means fixtures and appliances have to be covered by your individual policy. If your condo association has bare walls in the policy then you will need more dwelling coverage. 

Once you have figured out what type of dwelling coverage you need you to evaluate your options with an agent at Vargas & Vargas Insurance and discuss what it would cost to recreate your condo in the event a major accident happens. You can use an estimate from your mortgage lender or an estimate from a contractor or architect. Sometimes a mortgage lender will have a requirement for the specific amount of dwelling coverage you should have. It’s important to keep your dwelling coverage updated as you make improvements to your condos, such as a bathroom or kitchen renovation since it would be a higher cost to replace these new items.  

How Much Property Coverage Do You Need?

The easiest way to determine how coverage you need for your personal property in Dorchester, MA is by doing an inventory. Be sure that all your valuable items, such as jewelry, are covered. 

Contact Vargas & Vargas Insurance to get a quote on condo insurance. 

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

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.

3 Reasons You Need Condo Insurance

Whether you live in a condo year round or you own one that you vacation in from time to time, it’s important to protect it with condo insurance. Owning a condo is much different from owning your own home. Chances are, your condo is connected to other condos owned by other people. When something happens to a piece of the property that is connected to someone else’s condo, this makes things very confusing. Here at Vargas & Vargas Insurance serving the Dorchester, MA area, we’d like to share with you the top three reasons you need condo insurance.

It Might Be Mandatory

The first reason you may need to get a condo insurance policy is that it might be mandatory. If you have a mortgage on your condo, then your lender likely requires that you have condo insurance. You should check with the lender to determine the exact type of insurance policy that you need. Just like a regular home with a mortgage has to have homeowners insurance, a condo with a mortgage needs condo insurance. This protects both you and the lender.

Protect the Inside of Your Condo

Much of the time, the exterior of a condo receives protection through a condo association’s insurance policy, also known as a master insurance policy. This type of policy protects the exterior and any common areas, but it doesn’t protect the inside of your condo. You will need a condo insurance policy to protect your condo’s walls, ceiling, floors, fixtures, plumbing, and electrical wiring.

Protect Yourself From Lawsuits

If someone is injured inside of your condo, a master policy won’t provide coverage. The master policy only provides coverage if someone is injured in a common area. To protect yourself if someone is injured inside your property, you need your own condo insurance policy.

Different condo policies vary in the types of coverage they provide. It’s important to speak with an agent at Vargas & Vargas Insurance serving the Dorchester, MA area to learn about the different types of coverage you can gain through a condo insurance policy.

What Happens When the Main Condo Furnace Fails and There is Damage To Your Unit

If your Condominium unit gets its heat from a main furnace controlled and maintained by the Condominium Management, but it’s not part of your unit for which you are responsible, you may have some interesting insurance challenges should the furnace fail during the cold winter months; and you experience damage inside your unit.

When you own a Condo you are covered by two different Insurance policies.  The “Master Policy” for the Condo Building, generally covers all the common areas of the Condo.  It does not cover the inside of your Condo unit.

You insure the interior of your unit with your own insurance policy, typically called a HO-6 policy.  This insurance very much resembles renters’ insurance for apartment-dwellers. The premiums for an HO-6 policy are typically reasonably affordable.  These policies insure you for any claims you may have inside your Condominium unit.

But what happens when the main condo furnace goes out and you have damage in your unit?

We recommend the following as your logical course of action:

1.       Immediately contact the Managing Agent and inquire about filing a claim against the Master Insurance Policy for the Condo.  You should expect that you’ll run into some resistance here from the Insurance carrier for that Master Policy. They’ll attempt to direct you to your own HO-6 Insurance policy since the damage is inside your unit.

Remember, that damage was caused by the main furnace failing.  Stand your ground.

2.       Assuming you are successful in filing a claim against the Master Policy, you still may need to file a claim against your HO-6 policy for the finer points of items that would not covered at all, or not covered to the full extent of value for your precious belongings inside your Condo.

Review your current insurance policy now to be 100% sure you have all the appropriate coverages before it’s too late.

We’re happy to provide a free consultation to review your existing Master Policy and your HO-6 policy.  We want you to know the extent of your existing coverages for your protection and to help assure you of any additional coverages you may need.

The review is free of charge. Call us now at 617-298-0655 or text us at 617-409-0329. Click here to Visit our Contact Us page.

What Happens In The Event of a Water Leak in Your Condo?

If you own a Condominium (Condo), you may have equipment both inside and outside your unit for which you are responsible. In a closet inside your unit would be your water tank. There is also an HVAC unit that may be just outside your unit, to heat and cool your home.  Most of the time, you ignore these two quiet workhorses that keep you in comfort all year round.

Shockingly, every once in a while, and sometimes suddenly, the equipment may fail and need repair.  Most often and most inconveniently, the HVAC will fail when the temperatures outside are the hottest or coldest, depending on the time of the year. Thus, only your comfort is compromised.

However, every once in a while, these machines break down and leak.  With water. Lots of water.

If your HVAC unit is outside your Condo, this may not be as terrible of an event, unless you own a Townhouse and the unit is in the basement and there’s a danger of the water seeping into your basement.

But it can be really bad if you’re on an upper floor and one or several of your Condo neighbors lives below you.  Water loves to follow the powerful attraction of gravity: downward. Downward towards your neighbors’ Condo unit!

Yes, your first step is to call the emergency number for your equipment repair tech. If you’re not sure, call the property manager so they can dispatch someone immediately to mitigate the damage. If the property manager is not available, call your local insurance agent who will have access to reputable Restoration Services companies. They all have emergency lines so you’re covered seven days a week.

In the event of a leak which could lead to a potential claim, mitigating the loss is critical and required under your insurance contract. You’ll want the restoration company onsite as quickly as possible to dry out all the water and repair the water damage.  Do not forget to take photos of the damage before the restoration company arrives. It’s key that you document the extent of the damage at the time of the event. This also mitigates any confusion or misunderstanding of the extent of the loss when the claim is settled. The key word here is “mitigate”.  

You don’t want to be caught by surprise when a leak happens all over your downstairs neighbors’ precious Star Wars toy collection.  Review your current insurance policy now to be 100% sure you have all the appropriate coverages before it’s too late. The review is free of charge. Call us now at 617-298-0655 or text us at 617-409-0329. Click here to Visit our Contact Us page.

Review Condominium Financials Before You Purchase

Condominium (Condo) Buyers should obtain and review the financial statement of the Condo as part of your purchase process.  Have the statement reviewed by a professional such as an Attorney or CPA.  The financial health of the Condo can affect you in the future as you settle into ownership of your Condo unit.  The financial statements can also give you a good indication of the competence of the Condo Board and Managing Agent.

Condo Complexes on the smaller size may be exempt from having their financials audited. The ByLaws will identify if an audit is required.  Audited financials means the CPA firm has verified the numbers presented in the statement rather than compiling from information provided by the Condominium Board Members and/or Managing Agent.

The financial statement should cover the previous two years (three is preferable) and often a Year-to-Date statement.  A Financial Statement includes:

  • Income and Expenses for the entire Condominium.  This is also known as “Operating Statement.”
  • Balance Sheet demonstrating Assets and Liabilities.
  • Cash Flow Statement.

Some key areas you want to focus on include:

  • Reserve Fund (for major capital repairs and improvements),
  • Cash Flow to determine if the building is taking in as much money as it is paying out monthly, Maintenance Fees owed (an indicator of the financial responsibility of your soon-to-be-neighbors),
  • Footnotes.

The financial well-being of your future home is as important to the transaction as every other aspect of your purchase.  Request the Financial Statement as early as possible in the negotiating process, even before you’ve presented your Offer, if possible.

Review your current insurance policy now to be 100% sure you have all the appropriate coverages before it’s too late. The review is free of charge. Call us now at 617-298-0655 or text us at 617-409-0329. Click here to Visit our Contact Us page.