Vargas & Vargas Insurance

1133 Washington St
Dorchester, MA 02124

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Why Does My Mortgage Company Require Me To Get Homeowners Insurance?

Mandatory Homeowners Insurance: A Mortage Requirement

When buying a home and seeking a mortgage, you might be surprised to find out that your mortgage lender mandates homeowners insurance. Let the experts at Vargas & Vargas Insurance, servicing Dorchester, MA, assist you in acquiring homeowners insurance and determining the optimal policy for you.

Why Do Lenders Insist on Homeowners Insurance?

Mortgage lenders require homeowners insurance as it helps protect their financial interest in your home. If an unexpected disaster strikes, the lender wants assurance that they can recover the money they advanced to you for the house purchase. Homeowners insurance offers this assurance, covering the cost of repairs or rebuilding if needed.

Benefits of Homeowners Insurance

Apart from satisfying a mortgage requirement, homeowners insurance offers multiple benefits: • Peace of mind knowing your investment is protected • Minimizing financial risks if a covered event happens • Speeding up recovery after a disaster by offering the financial means to rebuild or replace.

Getting Homeowners Insurance: How to Proceed

If you find yourself shopping around for homeowners insurance to secure a mortgage and buy a home, it’s best to start as early as possible. Explore policies from different carriers until you get the perfect fit. Working with Vargas & Vargas Insurance can simplify this process.

Get in touch today to start shopping for your homeowner’s insurance policy, ensuring seamless progression on the path of homeownership. We can help answer your questions and obtain a quote.

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Pros And Cons of Hiring A Public Adjuster

Paying your homeowners insurance is a necessity for financial protection when unexpected home disasters occur. Roughly 1 in 20 insured homeowners file an annual claim, equating to an average of about 5%. In 2021, 5.3% of insured homes reported having a claim per these statistics from

But how do you navigate the claim process and determine the right compensation? This is where adjusters come in. Insurance companies have their own adjusters, but have you heard of public adjusters? Let’s explore the pros and cons of using a public adjuster compared to an insurance adjuster. Read on to learn more about handling insurance claims.

The Claims Process

Let’s use the example of water damage to explain the claims process. Imagine a scenario where a pipe bursts in your bathroom while you’re away, causing the bathroom to flood. Unfortunately, the bathroom is on the upper floor, so the water starts seeping through the ceiling into your kitchen, damaging your new hardwood flooring. The burst pipe results in significant property damage, prompting you to file an insurance claim to cover the repair costs.

To file the claim, you contact your insurance company and report the incident. They send their adjuster to assess the damages and determine the cost estimates. Once you both agree on the proposed amount from the adjuster, the insurance company provides you with the money for repairs.

But what if you can’t reach an agreement on the amount? This is when many homeowners decide to hire a public adjuster.

Distinguishing Between Public Insurance Adjusters (aka PA) and Insurance Adjusters

What sets apart an insurance company adjuster from a public adjuster?

The insurance adjuster represents the insurance company and handles claims by gathering information and estimating repair costs on their behalf. On the other hand, the homeowner hires and compensates the public adjuster.

Both assess and evaluate damage, providing repair proposals and cost estimates. The crucial distinction lies in who employs them.

Now, let’s delve into the advantages and disadvantages of both adjuster types.

Understanding the Role of an Insurance Adjuster

Here are some advantages of using the insurance company’s adjuster:

  1. Extensive Expertise: Insurance company adjusters often have broad experience, covering areas like plumbing, heating, cooling, electrical work, and finishing touches like drywall and paint.
  2. No Extra Cost: Hiring the insurance adjuster typically doesn’t incur additional charges for homeowners.
  3. Long-Term Relationship: Homeowners often stick with the same insurance company for years, so the adjuster is likely motivated to resolve issues properly rather than cut corners to save the insurance company money.
  4. Professional Reputation: Many insurance adjusters prioritize quality repairs over cost-cutting to maintain their professional reputation.

However, it’s important to remember that insurance adjusters ultimately work for the insurance company’s benefit, not the homeowner’s. So, in cases of substantial losses, some insurance companies might seek cost-saving measures.

How Public Insurance Adjusters Handle Claims

Many homeowners are unaware of public insurance adjusters, assuming that insurance adjusters work solely in their best interest.

A public insurance adjuster is hired and paid by the homeowner, usually receiving a percentage of the claim amount. Homeowners may choose to hire one, especially for larger claims, to ensure comprehensive coverage.

To make the most of a public adjuster’s services, it’s best to involve them early in the claims process, allowing them to communicate and work with the insurance adjuster from the start.

Finding a reputable public adjuster is essential. Start by examining their credentials, assessing their skills in damage assessment, experience in negotiating settlements with insurance companies, and their communication abilities. Check if they are members of the National Association of Public Insurance Adjusters (NAPIA), which upholds professional standards.

Benefits of Hiring a Public Adjuster:

  1. Knowledge and Professional Standards: Public adjusters undergo rigorous training and must meet state licensing requirements. They often belong to professional organizations that enforce skill standards. They are also typically bonded, fingerprinted, and subjected to background checks.
  2. Expertise in Insurance Claims: Public adjusters possess in-depth knowledge of home and business insurance claims and negotiation skills, ensuring they work closely with insurance company adjusters to achieve mutually agreeable settlements.
  3. Advocacy and Stress Relief: Dealing with a catastrophic loss can be overwhelming. Public adjusters act as advocates, relieving homeowners of the burden of negotiations and helping guide them through the process.
  4. Thorough Claim Assessment: Public adjusters have the experience to uncover hidden or less apparent damages, ensuring that no aspect of the claim is overlooked. For example, they can identify issues like mold formation or drywall damage resulting from concealed water damage.
  5. Maximized Settlements: Public adjusters often secure larger settlements for their clients. Homeowners may not be comfortable or confident in negotiating with insurance adjusters, and they might not even recognize overlooked claim possibilities. Public adjusters, with their expertise, know how to negotiate and request additional compensation where necessary.

In summary, hiring a public adjuster can be highly advantageous, especially when dealing with substantial insurance claims, as they bring expertise, advocacy, and the potential for a more comprehensive settlement.

Disadvantages of Hiring a Public Adjuster:

  1. Specializing in Major Claims: Public adjusters often focus on substantial claims, like total loss scenarios such as house fires. They prefer cases with significant payouts because their earnings are based on the final settlement amount. It can be challenging to engage a public adjuster for smaller claims, as they might not find them financially worthwhile. Before hiring one, research their preferred case types and request references.
  2. Payment Arrangements: Public adjusters typically work on a contingency basis, meaning you don’t pay them upfront; they receive a portion of the settlement amount. This fee varies by location and claim size, with an average of around 10%. Some adjusters may reduce their percentage for larger claims and increase it for smaller ones, which may influence their preference for taking on certain cases.
  3. Claim Settlement Time: While public adjusters can expedite some claims, involving more parties can potentially slow down the process. Increased negotiations between the public adjuster and the insurance adjuster may lead to delays. In cases where settlements can’t be reached, legal proceedings may be necessary, further extending the time it takes to resolve the claim.

It’s essential to weigh these drawbacks against the benefits when deciding whether to hire a public adjuster for your insurance claim.

Selecting the Ideal Public Adjuster for Your Needs

Choosing the right public adjuster is crucial for your insurance claim’s success. Here’s a simple guide to help you make the best choice:

  1. Check Licensing and Credentials: Ensure the adjuster is licensed in your state and holds relevant certifications to guarantee their expertise.
  2. Read Reviews and Ask for References: Look for online reviews and request references to assess the adjuster’s reputation and past client experiences.
  3. Understand Fees: Clearly understand the fees and compare them among different adjusters to find a fair rate.
  4. Evaluate Communication: Ensure the adjuster is accessible and communicates effectively to keep you informed.
  5. Review the Contract: Carefully review the contract, ensuring it’s clear and transparent about services and fees.
  6. Consider Relevant Experience: Choose an adjuster with experience handling claims similar to yours, as they’ll better understand the specific challenges of your situation.
  7. Consult your insurance broker for public adjuster recommendations, as they have encountered numerous adjusters and can advise you on who to avoid hiring.

Here’s a Pto-Tip

Avoid signing any documents or engaging the services of any business when you find yourself in the midst of an insurance claim, especially during times of heightened stress and uncertainty.

To safeguard your interests, consider the following steps:

  1. Contact Your Insurance Broker: Reach out to your insurance broker or agent as soon as possible after an incident. They can provide guidance on the initial steps to take and advise you on what information to gather.
  2. Document the Incident: Collect evidence related to the incident, such as photographs, videos, or written descriptions. This documentation can be invaluable when assessing damages or injuries.
  3. Review Documents Carefully: If presented with any documents, contracts, or agreements related to your claim, scrutinize them thoroughly. Ensure that you fully comprehend the terms and implications before signing.
  4. Consult Legal Counsel: In complex cases or if you believe your claim may involve legal matters, consider seeking legal advice. An attorney can help protect your rights and interests throughout the claims process.
  5. Take Your Time: It’s crucial to make informed decisions, so don’t rush. Consult with trusted professionals, gather information, and weigh your options carefully.

Your Local Independent Insurance Broker

Vargas & Vargas Insurance has assisted families and businesses with their insurance needs for over four decades. Whenever you need help, our team can contact you at 617-298-0655.

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Tips for making your home a safer place

Home safety is a significant concern for people everywhere. Home is where your heart is, but it is also where many accidents happen. Many accidents in the house are preventable if the correct measures are taken in advance. At Vargas & Vargas Insurance in Dorchester, MA, we want to make your home safer by providing you with the best and most affordable home insurance. 

Keep poison out of reach.

Many things we use daily in our homes are not safe if ingested by pets or children. It can be things like cleaning products or even laundry detergent. If you treat weeds in your lawn, these products may be unsafe if your pet or children get into them. Keep these products in a locked cupboard if possible but at the very least in a high location. 

Avoid falls

Falls are a major risk in the home. Some simple things, such as never placing things on stairs and removing clutter, can help decrease the risk. Don’t run extension cords across spaces where people walk; they are a trip hazard. Add slip-resistant mats or decals to your tub or shower. Make sure that the lighting is adequate so that you can see where you are going, and use night lights or motion activation lights. 

Common sense

Some things that can help keep you safe are just common sense things. Set your water heater temperature to a safe temperature. One hundred twenty degrees is recommended. Never climb a ladder alone; always have a spotter. Have a fire extinguisher in your home for small fires. Have smoke detectors and make sure they are working. 

Contact Vargas & Vargas Insurance in Dorchester, MA, either through our website or by calling or visiting our office. 

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What Does Home Insurance Cover?

The agents at Vargas & Vargas Insurance serving the Dorchester, MA area offer home insurance policies to protect and secure one of your most significant investments.

While home insurance is not required under Massachusetts law, having a good policy in place is still very important. If you owe money to a bank or mortgage lender for the purchase of your home, you will be required to carry a home insurance policy. Even if you’ve already paid off your house, you should still have homeowners insurance because you never know when disaster will hit.

What Does Home Insurance Cover?

A home insurance policy will cover the structure of your house along with the items inside of your house. These can include your personal belongings, such as toiletries, clothing, and jewelry, as well as your furniture, appliances, and so much more.

A variety of home insurance policies also cover any outbuildings on your property. These can include garages and sheds as well as decks and porches.

You never know when your house will become damaged or destroyed by a natural disaster, a fire, or even an act of vandalism. You also can’t predict that your home will be burglarized, but in any of these cases, your home insurance policy will help replace the lost items and repair or rebuild your house.

Contact Vargas & Vargas Insurance

The old saying, "It’s better to be safe than sorry," applies to home insurance policies. To create the best home insurance policy for you and your situation, contact the agents at Vargas & Vargas Insurance serving the Dorchester, MA area today!

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How Your Credit Score Will Influence Home Insurance Rates

There are many things that will affect how much you pay for home insurance. Of these, a credit score can make a big difference in how much you pay.

Much like using your credit to secure a loan or an account with most banks, your score will help insurers determine risks.

For this, they’ll use a “credit-based insurance” score, or CBI.

The Key Difference Between Credit-Based and FICO Score

Although both the CBI and FICO use the same data, the processing is a bit different. Insurers are using most of the data associated with your credit, but not all of it.

Unlike trying to apply for a line of credit, the CBI is essentially used from the perspective of property risks and management.

What Affects your Credit-Based Insurance Score?

Essentially, a lot of the same factors are at play when using a credit-based insurance score as everything else. As I said before, the biggest difference is what data is used when determining your rates.

So, what kind of things will affect your CBI?

Length of Credit History Affects Your Score

The longer you have a history of credit, the better. Unfortunately, this can hinder some of the younger people looking to buy a home and secure insurance.

This is why it’s important to start working on your credit as soon as you’re able.

Credit and Bank Accounts in Good Standing

The number of bank and credit accounts you have in good standing are great benefits toward your CBI and FICO scores. This tells insurers that you’re responsible and can manage your finances well.

In fact, a lot of people will hang on to bank accounts they don’t necessarily use often simply because of how long they’ve had it.

Zero Late Payments and Your Credit Score

Having no late payments on your account is another vastly important factor.

Now, this doesn’t mean that a few late payments here and there will result in an overwhelming poor score. But keep in mind, they will affect your insurance rates.

Overall Credit Usage

How many credit accounts do you have maxed out? The percentage of how much credit you have available for each account will weigh in on your CBI.

Try to pay down your credit as much as possible when applying for new accounts or when looking for new insurance.

Debtor Collection Issuance

Have you had debt collectors call you up in the last seven years? Having a debt collector against your credit score will impact virtually any type of account.

But keep in mind that every agent is different when figuring out your CBI. Having a debtor against your credit may not weigh too heavily, depending on the account.

Recent Multiple “Hard” Hits Affect Credit Score

Having several hard hits on your recent credit history will decrease your score. Mostly, this is because it throws up a red flag to issuers that you run the risk of over-extending your monthly finances.

In other words, don’t apply to every credit card company that comes your way right off the bat. Too many recent inquiries will sink your score quite quickly.

How is Your Credit Score for Insurance Rates?

A poor credit score can make it more difficult to buy properties, but it can also increase your home insurance premiums. At Vargas & Vargas Insurance, we’ll use our network to find the best policies for you. Contact us today to find out how we can help you, even if you have terrible credit.

You may wind up saving more than you thought.

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How Much Will Your Location Impact Home Insurance Rates?

Home insurance is not equal across the board. In fact, there are many, many factors that come into play when figuring your premiums. This includes how rates are affected by the location of the property.

This boils down to how much of a risk factor is associated with your home because of its physical location. And this goes beyond the base an insurer may use for calculations.

What Location Factors Affect Rates?

There are many aspects to consider when pricing out a home insurance policy. Today, we’re just looking at the most common locality issues that will adjust your rates.

While every insurance company is different, these are some of the most used elements for consideration.

State and City Make a Difference

Perhaps one of the biggest location factors for a lot of industries is that of state and city. Your zip code could say an awful lot about everything from insurance rates to groceries.

For instance, what you pay in Boston, Massachusetts, would be significantly different than in Williamstown, Massachusetts, for an identical home. That’s before other factors are even calculated.

Rates can also be adjusted for the location of the neighborhood itself. If your home is in a particularly dangerous area, rates could easily go up. This is because occurrences like vandalism, theft and other crime-related events are more likely to result in claims.

Proximity to Houses and Buildings

How close your home is to any other structure may result in higher insurance rates. This is because there is a greater risk to the property.

For instance, let’s say your home is very close to another. If that other house catches fire, your home is at a much higher risk of joining the blaze. And it’s not just other homes, as your rates may increase if any building is extremely close to your house.

Proximity to Fire Protection Services

In many instances, simply the location of a fire department may affect rates. This includes elements such as whether there is a nearby fire hydrant.

The bottom line is that the longer it takes departments to put out a fire, the more damage that is done. This results in a higher rate of claim, which then translates to higher premiums.

Weather Risks of Locations

Weather will also play a factor in home insurance rates, especially as you’ll have to add extra coverage for specific types of weather events.

For instance, those who live in a tornado-prone area are more likely to face tornadoes, while those closer to the west coast have more concerns about earthquakes. People who live in hail-prone areas that cause damage to vehicles, homes, and other property.

If the location of your home experiences specific weather patterns, you’ll be on the hook for more expensive policies.

As Location Will Affect Your Rates, Keep Discounts in Mind

Where your home is located will directly impact your home insurance premiums. However, there are also many ways you can secure discounts to save you on your annual insurance premium.

At Vargas & Vargas Insurance, we can help you find those discounts while accessing a network of providers to save you the most money possible. Contact us today to find out how we can assist with your insurance needs.

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How Homeowner’s Insurance Policies Can Be Incredibly Different

Homeowner’s insurance helps to alleviate financial issues in the event of an emergency. However, not all insurance policies are the same across the board. There are a lot of things that are considered when setting up the policy. In fact, it’s quite possible that your premiums will be different from someone who lives across the street.

Even if your neighbors are using the same insurance provider.

Age of the Residence

One of the primary elements that will adjust your premiums is the age and condition of the home. If you have an older structure, there is a good chance you’ll pay more in premiums.

This is partly because of the increased risk involved in outdated materials and repairs. Things like plumbing, wiring, the condition of the foundation, and more can affect how much you’ll pay for your policy.

Perhaps one of the most important aspects is that of the roof. Leaks will easily cause an incredible amount of damage, especially if you don’t catch them in time.

Home Repairs and Costs

Repairs and rebuilds make up a significant portion of many insurance policies. And things like inflation will affect the costs of these repairs.

For instance, if the price of wood goes up, so will your homeowner’s insurance. This is because it becomes more expensive to pay for repairs or rebuilds if the home requires wood, which most will.

Generally speaking, higher-priced homes often have a higher premium due to the cost of repairs. For instance, it’s more expensive to replace French doors to a patio than a regular backdoor.

Preventative Measures and Upgrades

Did you know that installing some preventative measures may actually reduce your insurance policies?

Case in point, some insurers will provide as much as a 10% discount if you have a central station burglar and/or fire alarm installed. This is because these things help reduce the risk of theft and damages, which then saves the insurer money in future claims.

The discounts will vary from one insurer to another. But generally, most offer discounts in some form if you install preventative devices or by updating parts of the home.

For example, if you update your roof or install new electrical and heating systems, your home could go from a “standard” rating to one that is “preferred.” This can save additional money on your premiums.

Working from Home

Since 2020, the prospect of working from home exploded throughout the world. Unfortunately, homeowner’s insurance policies don’t ordinarily cover business expenses or losses.

This means that if you run your business or otherwise work from home, you’ll need additional coverage for anything you use. This could include products, computer equipment, and anything else you’ll need to perform your job.

The additional equipment will easily increase your premiums.

Bundling Insurance Policies

A lot of people will bundle their policies together to reduce the overall cost every month. This is when you have your homeowner’s, automobile, and even life insurance policies from a single provider.

It’s quite a common practice, really. Some providers will offer discounts if you use them for all of your insurance needs. And in many cases, you’d be hard-pressed to find a cheaper alternative by using a separate insurer for everything.

Insurance Policies are Different for Everyone

When it comes to homeowners insurance policies, there isn’t a one-size-fits-all answer. Every home and situation will differ greatly, especially if you decide to include additional coverage for certain valuables, especially if you plan to work from home.

At Vargas & Vargas Insurance, we’ll do our best to find you insurance policies that fit your needs. Contact us today to find out how we can help keep your home, and your property, protected in the event of a catastrophe.

Not all insurance policies are the same, and we can help you secure one that is ideal for your situation.

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Insurance Coverage: Are Maintenance Costs Covered?

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.

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Insurance Coverage: What Happens During a Flood?

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.

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Why Do Insurance Rates Increase Over Time?

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.

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