How Does Condo Insurance Work?

Owning a condo is a great way to own your own home. It does come with a number of responsibilities, though, and one of the most important of these is to have a condo insurance policy. This policy protects you in a number of ways, and it’s never a good idea to be without it. If you need one of these policies, contact us today at Vargas & Vargas Insurance in Dorchester, MA to talk to an agent. 

Protect Your Home

When you have a condo insurance policy, it covers your condo itself. This means that it will pay for certain damages to the inside of your condo, but not the outside. The condo board owns the outside and will insure that area. The only exception is when a condo owner makes some type of improvement to the outside of the condo. In that case, the owner is responsible for insuring that area as well. 

Protect Your Possessions

With all or most of your belongings inside your condo, a major accident or calamity that causes damage to your belongings can be devastating. However, your condo insurance will cover those possessions. It can pay for you to get repairs and/or to replace items that were ruined beyond repair. With this coverage, you won’t have to start over with nothing. 

Protect Your Finances

Another problem that can happen in a condo is a third party having an accident there. When that happens, it is often the owner who owes the medical bills. With a condo policy, there is liability coverage included. This will pay for the medical bills so that you won’t have to. 

Condo Protection

If you own a condo, you need protection. Call us at Vargas & Vargas Insurance in Dorchester, MA to find out more about this coverage. 

Condo Insurance Coverage Terms You Need to Know, Part Two

couple buying their first condo

Having a condo insurance policy brings peace of mind — that is, until you’ve had a claim and realize you don’t understand any of the policy’s terminology. Vargas & Vargas Insurance is committed to making sure you have all the tools you need (and a full understanding of common condo insurance coverage terms) to make the best decisions about your condo insurance coverage. Your home is important to you. Understanding your condo insurance policy is vital to making sure your home has the right protection. 

Condo Insurance Coverage Terms

Bare Walls/Single Entity/All-In Master Policies

Your condo association will have a master policy in place to cover the building itself and common areas. There are multiple types of master policies. Knowing which type of coverage your condo association master policy has will help you determine what coverage you need.

Bare Walls

This coverage covers the condo building and common areas. The master policy covers everything from the sheetrock back. But the area within the bare walls is the condo unit owner’s responsibility, including light fixtures, faucets, and everything else. This is the most common type of condo association master policy.

Single Entity Coverage

In this case, the master policy covers the unit as is when the owner moves in, including cabinets, flooring, etc. 

All-In Coverage

This rarest form of condo association master policy covers everything but your personal property, including any alterations and improvements you make after moving in. 

Dwelling Coverage

Once you’ve determined what your condo association’s master policy covers, you are responsible for the rest. Your condo insurance policy’s dwelling coverage will cover all the permanently affixed items not covered by the master policy up to the dwelling coverage limit. 

Personal Property Coverage

This includes all of your personal belongings, such as clothing, furniture, electronics, household tools, and more. It’s important to speak with your agent about items you think fall into this coverage area but may actually not. Examples might be golf carts and four-wheelers. Keeping an inventory of your personal property is important, too; you will need to itemize them in the event of a loss. 

Unit Improvements and Betterments Coverage

This coverage protects the upgrades you’ve made to your condo unit, which your condo association’s master policy might not cover. This could include upgraded flooring, cabinetry, light fixtures, or faucets. You’ve worked hard to make your condo personalized for your family. So make sure those upgrades have coverage. 

Liability Coverage

While the condo association master policy may provide some coverage for liability incidents on common property, that doesn’t release you from responsibility for liability within your residence. In a condo, your liability risk increases due to the proximity of other condo units. Liability coverage provides legal protection up to your policy limit. Most policies come with a basic amount, but you can increase it for a minimal additional premium. 

Additional Living Expense/Loss of Use

When a claim occurs, your condo may not be inhabitable for a time. This is why Additional Living Expense coverage, also known as Loss of Use coverage, is so important. This coverage will help with the cost of displacement up to the time period specified in the policy. 

Endorsement

An endorsement is an addition to your condo policy. You may need more coverage than allotted in your basic policy in a particular coverage area. Endorsements allow you to add that coverage. A common example is jewelry. Most policies provide a limited amount of jewelry coverage but allow more coverage through endorsements. 

Exclusion

An exclusion is a coverage area that is specifically not included in your policy. Your policy will have a list of exclusions. It’s imperative to review these exclusions because there are often options to provide coverage for the excluded perils separately. One example is flooding. A flood is usually an excluded peril; however, flood insurance is available as a stand-alone policy. 

Inflation Protection

The cost to repair or replace damage to your home and belongings does not stay static. So most condo insurance policies include inflation protection, which raises your coverage in small increments each renewal, as needed, to keep pace with inflation. 

Risk/Peril

A risk is the possibility of something unexpected happening. A peril is the cause of something unexpected happening. For example, the peril of a fire increases the risk of damage to personal property. Knowing what perils are covered under your policy is imperative for you to have proper protection from the risks you face as a condo unit owner.

 For more condo insurance coverage terms, see part one of Condo Insurance Terms You Need to Know. Condo insurance coverage terms can be intimidating while also being vitally important. That’s why Vargas & Vargas Insurance, a premier local independent insurance agency, is here. We will customize your insurance coverage to your specific needs at the right price and are here to answer all of your insurance questions. Contact us today.

Condo Insurance Terms You Need to Know, Part One

family on the upstairs balcony of their condo

Your condo is your home. It’s the place where you make memories. Insuring it properly can be confusing because condos are a little more complicated to insure than your typical home. Condo unit owners share responsibility for the home with the condominium association. What does this mean, and how does it affect your insurance? Vargas & Vargas insurance can help you navigate the often confusing world of condo insurance and condo insurance terms. 

General Condo Insurance Terms

Condo 

A condominium (condo) is a unit that is individually owned within a building that contains other units, which are also privately owned. All unit owners share ownership of commons areas, including pools, gyms, playgrounds, etc. 

Insured/Insurer

The insured is the person coverage is being provided for, generally the owner of the condo. The insurer is the insurance company providing the coverage for your condo. 

Additional Insured

The declarations page will list the additional insured, along with the insured. The additional insured is anyone else other than the condo owner who has a legal interest in the home. The most common additional insured for a condo policy is the mortgage company. An additional insured will be notified of the policy renewal and if the policy is in danger of cancellation. They may also be payees on larger claims checks. 

Condo Association/Condo Association Master Policy

A condo association is an organization that handles the day-to-day operations and decision-making for a condo community. They and the policies they handle are the major differences between home insurance and condo insurance.

This includes purchasing a condo association master insurance policy. The master policy covers the areas common to all unit owners. The unit owners are typically responsible for everything within the unit’s walls. The condo association master policy covers the rest of the commonly owned structures. However, each policy can be different, so understanding your condo association’s master policy is essential to understand your own condo insurance needs. 

Policy Period

This is the time period your condo is currently insured for, which is usually one year. Most condo policies renew automatically, assuming you continue to pay the premium. 

Premium

The annual amount you pay for your condo insurance is called the insurance premium. This premium can usually be divided into convenient payments of monthly, quarterly, or semiannual installments if it’s not paid directly to the insurance company through your mortgage escrow account. 

Deductible

The deductible is the amount the insured (the condo unit owner) is responsible for in the event of a claim. If a claim is less than the deductible amount, the insurance company bears no responsibility for payment of the claim. If the claim is more than the deductible, the deductible will be subtracted from the claim’s total amount before the insurer pays out. The deductible does not go to the insurance company. 

All-Risk/Named-Peril

An all-risk insurance policy covers all potential causes of loss other than those specifically excluded in the policy. A named-peril policy covers events if the policy lists out those specific causes of loss. While an all-risk policy can be more inclusive, it is generally much more expensive and not as common. Most insurers choose to cover the most common risks, providing a broad scope of protection while keeping premiums affordable. 

Replacement Cost (RCV/ACV)

When you purchase your condo, the sales price is based on the market value of your home. The desirability of the location and many other factors determine that price. But when you have a loss, the location’s desirability has no bearing on the cost to rebuild your home or replace your roof. That’s why it is important to understand the difference in replacement cost and actual cash value.

The replacement cost value is the cost to replace a damaged item or item, whether it be your TV or all of your belongings. The actual cash value takes into account the depreciated value of the item. For example, if your sofa is five years old, then you got five years’ worth of value from your sofa. So your company will take a deduction from the amount paid for your claim that takes into consideration the age of the sofa. Knowing which type of coverage you have before a claim can prevent many misunderstandings.

General condo insurance terms are important to know, but there are many more terms that can make all the difference in understanding your condo insurance. For more insurance terms, see part two of Condo Insurance Terms You Need to Know

Vargas & Vargas Insurance is a premier local independent insurance agency. We work for our clients and not the insurance company. We will customize your insurance coverage to your specific needs at the right price and are also here to answer all of your insurance questions. So contact us today.

Downsizing or Rightsizing: Choosing a House and More

You may want to downsize from your primary residence to a smaller home that suits your current stage in life. Choosing a house that fits your lifestyle based on where you are in life is also known as rightsizing. You can downsize or rightsize for various reasons, including reducing expenses like housing costs proportional to the size of the home you live in. Some of these costs to consider include:

• Insurance

• Utility costs

• Furniture

• Home maintenance

A smaller house can significantly reduce your expenses and impact your insurance coverage. So, if you are wondering how downsizing or rightsizing will impact your insurance coverage, read on.

1. Home Office Insurance Implications

A home office can alter your home insurance coverage and increase the cost. The insurance company may consider additional people who come to your house as an insurance risk, increasing your home insurance cost. If you plan to rightsize and cut costs, a downsized home should not have a home office.

2. Downsize Number of Cars

When downsizing the number of cars you have, you save on insurance costs. The insurance quotes for your family cars include the car model and how often you drive it. 

If you own a sports car that’s expensive, it will cost more to insure compared to an SUV or a minivan. If you have two vehicles, you can eliminate the second one if that’s possible, depending on your family transport needs. This will save you money, especially on car insurance quotes.

3. Personal Auto Insurance Policy for Your Child

If your last child moves out, it will be wise to make sure the child has personal auto insurance coverage under their name. If they don’t have this policy, you might have to pay for expenses, or they will be expected to pay directly. Most auto insurance policies’ definitions of a family member require the family member to be part of your household.

4. Consider a Smaller House Without a Pool

A pool can be a liability, especially if you want to cut costs. As a homeowner, you will be liable for anyone that uses your pool with or without your permission. You may have to incur expenses up to 100,000 dollars in case of a pool accident. You can avoid these costs by not having a pool in your smaller house.

5. Smaller House Versus a Condo

Depending on your needs, you can choose to downsize to a condo or a smaller house. Condos are typically cheaper to maintain, considering that the condo association is responsible for the exterior walls, roof, and shared spaces. You will also not be thinking about landscaping.

Vargas & Vargas insurance is one of the premier local independent insurance agencies. We work for our clients and not the insurance company. We will customize your insurance coverage to your specific needs at the right price when downsizing or resizing. Contact us today — we’re here to answer all your insurance questions. 

A Quick Guide to Shopping for Condo Insurance

couple shopping for condo insurance on their computer

If you are shopping for condo insurance, there are some things that you will need to understand to ensure that you get the right coverage for your specific needs. Knowing what the condo association insurance already covers is an excellent place to start. This will enable you to get condo insurance coverage that fills the gaps.

Condo association insurance covers mostly common areas within the building like roofs and shared spaces like walkways, but check with your condominium association for specifics on what they cover. Most master policies provide coverage for these areas:

• All-in policy

• Bare wall policy

• Original specification policy

Most contracts of the association will cover exterior damages of the building, and the condo owner will be responsible for managing the interior. With this information, you can assess your specific needs before getting condo insurance to fill the gaps. Here is a guide to what you need to look for as you shop:

1. Look for the Best Rates

If you have a car, you can get a discount of between 5% and 15% for a package that includes auto and condo insurance.

2. Consider the Features That You Need

Assess your needs and choose the policy that fits. Typically, condo insurance coverage will include coverage for:

• Damage to personal property

• Personal liability (for you and your family)

• Loss assessment

• Building property and fixtures

• Loss of use

You can also find additional features like identity theft and many more that might be specific to you as you start shopping for condo insurance.

3. Choose the Best Customer Service

You will need to get in touch with your insurance at a time when you are stressed. This can be due to theft or a disaster. Good customer service will be beneficial at that time. Look out for a company with a good customer service reputation.

Shopping for Condo Insurance Is Easy With Vargas & Vargas

Vargas & Vargas Insurance is one of the premier local independent insurance agencies — we work for our clients and not the insurance company.  We will customize your insurance coverage to your specific needs at the right price, and our team is here to answer all of your insurance questions. Contact us today to get started.

What Does Condo Insurance Cover?

family sitting together in a condo

Condo insurance is property insurance for condo owners. It’s designed to protect the condo contents and repair the unit in instances of fire or burglary. Condo insurance provides liability coverage for the condo owner, too. Today, we’ll take a closer look at Massachusetts condo insurance. We’ll explore the coverages and perils that policies can insure against — and highlight some gaps, too. Remember, if you have deeper questions about condo insurance, talk to a licensed insurance agent at Vargas & Vargas Insurance today!

What’s Covered by Condo Insurance in Massachusetts?

Condo insurance policies in Massachusetts are similar to homeowners insurance, with a few key differences. The basic idea is the same — it’s an insurance policy that protects the condo owner from loss from perils like:

  • Fire
  • Wind
  • Hail
  • Lightning
  • Burglary or theft
  • Civil riot 
  • Malicious mischief

In a nutshell, if your condo burns down or gets burglarized, then your insurance company will reimburse you for your belongings. Remember, condo insurance will only pay up to the policy limits (after the policyholder pays a deductible). It’s vital to know whether your condo insurance policy will pay you the Actual Cash Value (ACV) of your belongings or Replacement Cost (RC)

Liability Coverage

“Liability” means responsibility. In Massachusetts, most condo insurance policies will include liability coverage. If a visitor stumbles in your home and breaks their ankle, this insurance covers you. 

What’s NOT Covered by Condo Insurance?

Condo owners don’t have an interest in the outer property. Your condo insurance policy won’t cover the condo building’s exterior, separate structures and outbuildings, fences, trees, and landscaping. 

Also, know that certain luxury items in your condo might not be covered. If you own an $18,000 painting by Pablo Picasso or a luxury strand of pearls, you’ll need to have them specifically added to your condo insurance policy. In addition, a standard condo policy in Massachusetts doesn’t cover some perils. Floods, for instance, require a separate flood policy.

Vargas & Vargas Insurance is proud to be your premier local independent insurance agency. We work for our clients, not the insurance company. We’re ready to customize your condo insurance to your unique needs at the right price, and we’re here to answer your insurance questions. Contact us today.

How Much Condo Insurance Do You Need?

couple sitting in their furnished condo

The purpose of condo insurance is to protect your financial investment in your belongings and provide liability coverage. If you under-insure your belongings, you won’t be made whole again after a fire or burglary. If you over-insure, you’ll be paying a higher insurance premium than you need to pay.

Imagine a fire rips through your condominium. Thankfully, everyone gets out safely. Your condo insurance will cover most belongings, less a deductible. Therefore, you should buy enough contents coverage to replace all your belongings and be made whole after a loss. 

So today, the team at Vargas & Vargas Insurance will explain how to decide how much condo insurance you need. We’ll talk about contents coverage and also touch briefly on liability coverage. The first step is to tally up your belongings.

Contents Coverage: Tally Up Your Belongings

Grab a notebook and take a walk through your condo. Start by jotting down the big-ticket items.

If you add it all up, then you’ve probably spent significant cash on:

  • Furniture — including bedroom sets, mattresses, dining room sets, and living room furniture
  • Appliances
  • Wardrobes, shoes, and accessories
  • Hobby items and craft supplies
  • Electronics — such as televisions, computers, tablets, cell phones, and all the related accessories and chargers
  • Decor — including area rugs and window treatments

Then, start thinking about the money you have tied up smaller items like linens, towels, and cosmetics. Also, don’t forget the medicine cabinet and medical devices. Suddenly, you’ll realize you have anywhere from a few hundred to a few thousand dollars of personal belongings in the bathroom alone!

What’s your final number? A single individual might own $50,000 worth of belongings easily. A family of five might need $200,000 in contents coverage for a start.

Next, it’s time to think about liability coverage.

Condo Insurance and Liability Coverage

Most condo insurance providers offer packages that include a pre-set amount of liability coverage. It may be $100,000, $250,000, and so on. You can always ask for more liability coverage, and in today’s litigious society, more coverage is better

We should also point out that some umbrella insurance policies (which are additional liability policies for families with many assets) have minimum property liability requirements. In other words, if you have an umbrella policy, it might require that you maintain $500,000 or $1 million of liability coverage at your residence.

We’re Proud to Be Your Premier Independent Insurance Agency for Condo Insurance

Vargas & Vargas Insurance is proud to work for our clients, not the insurance company. We can customize your condo insurance policy to suit your specific needs and budget. We’re ready to answer your condo insurance questions, so contact us today.

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.