What Is Personal Property Insurance?

Personal property insurance is part of a home insurance policy. It provides coverage for the items in your home that are damaged or lost due to events, called named perils, such as fire, lightning, smoke, theft, and vandalism. In this article, we’ll discuss what types of coverage you can have and what you need to know as you shop for a policy.

couple playing on an insured piano in their home

Personal Property Types of Coverages

There are two types of personal property coverage:

  1. Actual Cash Value (ACV)
  2. Replacement cost value

An actual cash value policy is where an agreed-upon amount is decided upon when drafting your policy, which is the replacement value of the item minus depreciation. This amount is what you will be paid if the property is damaged or stolen. The insurance company will reimburse the agreed upon actual cash value in qualifying circumstances. 

Replacement value is the second type of coverage. This coverage allows you to replace the item with another item of “replacement value.” In other words, it covers the cost of replacing the item with another similar item — a TV for another TV, for example. To get reimbursed by your insurance company with this method, you must generally buy a replacement item and submit your receipts to the insurance company for payment.

Personal Property When You Have a Home, Condo or Renter Insurance Policy

Personal property is covered differently depending upon whether you have traditional home insurance or condo or renter’s insurance. Home insurance will usually cover your personal property for an aggregate amount of up to 50% of the dwelling amount, or the amount your home is insured for. So if your home is insured for $240,000, your personal property will be insured for $120,000. If you’d like to have more insurance for your personal property, you may have the option to choose more than 50%, but with a higher premium. 

Renter’s or condo insurance provides coverage amounts a bit differently. You will be able to pick the amount of insurance you want based on your estimate of coverage needed. This amount will depend upon what you own and how much it is worth. The coverage amounts vary by the insurance provider and by the specific type of policy offered.

More Valuable or Expensive Personal Property

If you own items that are more valuable, such as antiques or collectibles, you might invest in additional insurance for this coverage. You may hear terms such as floater, endorsement, or scheduled personal property. These actually refer to additional coverage that you may purchase to cover valuable items that might not be covered specifically under your home owner’s insurance coverage limits.  

Contact us and let us help you with your personal property insurance needs. Vargas & Vargas Insurance provides friendly assistance with all of your coverage needs.

Protecting Your Most Prized Possessions: How to Insure Your Engagement Ring

The question has been popped, and now you’re sporting a shiny new rock on your left hand. Congratulations! Before you start hearing church bells and say, “I do,” it’s important that you take the time to protect your valuable new asset with the proper insurance policy. While ring insurance may not be the most romantic thing you’ve ever thought of, protecting your beloved piece can give you peace of mind. You’ll know you’re covered in the event of an unfortunate situation. Here’s what you need to know about getting your engagement ring insured.

man proposing to a woman while holding an engagement ring

1. Don’t Wait to Insure Your Ring

As soon as the ring is purchased, you or your fiancé can have it insured. The sooner you choose to do so, the sooner you’ll be protected. 

2. Understand How the Insurance Works

When it comes to finding an insurance company to insure a piece of jewelry, you have two options: adding it to your homeowners or renters policy, or finding an independent company that specializes in jewelry. The cost of the insurance will depend on if your insurance company requires a deductible and where you live. For policies with no deductible, you will likely pay more in monthly premiums. On average, you can expect to pay $1 to $2 for every $100 your ring is worth.

3. Ask the Right Questions

Before you commit to a policy, be sure to ask your provider these questions:

  • Are you covered for damages, loss, and theft?
  • How do you prove that the ring disappeared?
  • What circumstances aren’t covered?
  • Can you choose who does repairs on the ring?
  • If a replacement is covered, where are you allowed to buy a new ring?

4. Get It Appraised 

Choose an appraiser who has the proper credentials to give you an accurate value of the ring. Be sure to keep a copy of the documentation that proves your ring’s condition and worth, so that you can not only have it replaced if something happens, but also so that you pay the appropriate premium on your investment.

While some appraisal services may try to exaggerate the value of your ring, getting the actual value of the ring is critical to keep you from paying higher monthly premiums unnecessarily. It’s also worth noting that most insurance companies will choose to replace a missing ring rather than write a check to the consumer to replace it. Many already have relationships with jewelry wholesalers and will never pay the retail price or pay for an inflated appraisal value.

Vargas & Vargas Insurance can help you enjoy your engagement ring for years to come without worrying about it getting lost or damaged. Contact us today to learn more about our competitive insurance services and how we can protect your most prized possession.

What Can I Do About Forced Place Insurance?

man researching a home insurance policy to replace his forced place insurance

Forced place insurance is only applied after a homeowner has failed to meet insurance requirements as detailed in their mortgage. So the first step in avoiding the additional cost of this type of insurance is staying on top of your insurance obligations. Know exactly what type of insurance coverage your lender requires before purchasing a home, and do your research to find a cost-effective policy that meets your needs. Justly as importantly, keep up with your payments to prevent your coverage from expiring. 

If you do find yourself unexpectedly billed for forced place insurance, there are steps that you can take to have the policy removed. First, you will need to pay the premium as soon as possible in order to prevent your lender from taking further action, such as seeking foreclosure. This buys you a limited amount of time to correct the issue in order to prevent it from becoming a larger problem. 

Once you have taken care of this crucial step, search for a new insurance policy to replace the forced place insurance. You will either need to restart your expired policy or purchase a new one that meets your lender’s requirements. 

Then, once you have purchased a replacement insurance policy, provide your lender with a written request to remove the forced place insuranceand proof that your new policy fulfills the requirements. Be sure to stay informed about any changes to your lender’s requirements in order to avoid future insurance problems.  

Removing Forced Place Insurance Is Simple with the Right Insurance Service

Although forced place insurance is expensive and inconvenient for homeowners, it is an issue that is relatively easy to resolve. By providing your lender with proof that you have corrected your error, most homeowners can quickly return to their chosen homeowners insurance policy instead of paying far more for forced place insurance.

 At Vargas & Vargas Insurance, we are experts at getting you the right coverage at the right price. Call us at 617-298-0655 today to learn more about our services!

What You Need to Know About Forced Place Insurance

young couple in their living room

Unexpectedly finding yourself paying for forced place insurance can create a significant dent in your monthly budget. This type of insurance is a lender’s response to expired or insufficient insurance, and it costs significantly more than your own policy. It sometimes as much as four times the cost of your own policy. Fortunately, there are steps homeowners can take to resolve their current insurance deficiencies and request that their lenders remove the forced place insurance policy. 

What Is Forced Place Insurance? 

Forced place insurance is an insurance policy that your mortgage company purchases to cover their interest in your home if:

  • You let your home insurance policy expire, or
  • Your policy does not meet their coverage requirements.

Forced place insurance generally only covers the cost of your mortgage. While other insurance policies cover your possessions and the full cost of replacing your home, as well as protect you in the event of a lawsuit, forced place insurance does not protect the homeowner and only replaces the cost that protects your bank or mortgage company. 

Why Is Forced Place Insurance So Expensive?

Forced place insurance is generally more expensive than regular homeowners insurance. That’s because it is an extra step that your lender needs to take if they determine that you have not met the insurance requirements specified in your mortgage. Because your property must be insured in order to protect your lender, allowing your homeowners insurance to expire — or purchasing a policy that does not meet the needs of your area — gives your lender the right to purchase any policy they choose for your property.

In many circumstances, the cost of forced place insurance can cost multiple times the amount of a typical homeowners insurance policy. Because the cost of this policy becomes the homeowner’s responsibility, most lenders will not shop around for an affordable option.

If you want to know more about forced place insurance and how to get a more favorable policy, we can help. Contact Vargas & Vargas Insurance today.

What You Need to Know About Personal Property Insurance (for Your Home)

family in their home

Homeowners insurance in Massachusetts is complicated. That’s why the staff at Vargas & Vargas is creating blogs. We want to help our customers understand the most important insurance topics as they relate to YOU. With this article, we’ll explain personal property insurance, also known as contents coverage.

As always, feel free to reach out to us directly to speak to a licensed agent if you have questions beyond the scope of this article.

What Is Personal Property Insurance?

Personal property coverage, or contents coverage, is a protection built into your homeowner’s policy for the contents of your home. It covers your belongings, like:

  • Furniture
  • Clothing
  • Carpeting
  • Dishes and cookware
  • Almost everything else you own (with a few exceptions)

Take a look around your home. What would it cost to replace everything if the home was to burn down? It would probably cost quite a bit. So most homeowner’s policies will start their basic guess of your personal property’s value at 50% of your home’s reconstruction value. In other words, if we believe your home would cost $300,000 to rebuild, we can guess that your belongings are worth about $150,000. 

To get more refined valuations, keep receipts for the more expensive purchases in your home. They can be very helpful after a loss. Also, every homeowner’s insurance policy is unique. Some programs provide more contents coverage than others. So talk to a licensed agent if you feel your contents coverage isn’t enough. We can always provide more!

What Isn’t Covered?

Certain items aren’t protected by personal property coverage. The list includes things like:

  • Luxury jewelry
  • Fine art
  • Expensive furs
  • Heirloom antiques and collectibles of high value

If you own valuables like a $70,000 painting or a $20,000 Gibson guitar signed by John Lennon, then talk to your agent to get it endorsed on your homeowners policy.

But if you own a $13,000 diamond ring, you’ll need special insurance for it. This type of coverage is called a Personal Article Floater (PAF) — or simply a “floater” — in the industry. Just provide us with certified appraisals, and we’ll do the rest!

Need to talk about personal property insurance? Vargas & Vargas Insurance has service centers all around Massachusetts, and we’re happy to help. Email us today or call 617-298-0655 to speak with a licensed agent.

All About the Circuit Breaker Income Tax Credit for Massachusetts Homeowners and Renters Age 65+

older couple organizing their tax information to get the Circuit Breaker Income Tax Credit

It’s tax time! At Vargas & Vargas, we’re Massachusetts licensed insurance agents and tax professionals, and we’re ready to help. We want our customers to be aware of the Massachusetts “Circuit Breaker” tax credit for folks who are age 65 and up. We know that every cent counts at income tax time. This income tax credit can be valuable for seniors, whether they own a home or rent.

Seniors Might Get a Cash Refund From Massachusetts — Even If You Don’t Pay State Taxes 

According to this Massachusetts Association of Councils on the Aging (MCOA) fact sheet, the “‘Circuit Breaker” tax credit program is a program for individuals aged 65 and older, whose property taxes and half of the water and sewer bills are more than 10% of their annual gross income. Renters can qualify for the credit, too, if your rent is more than 25% of your income and you meet a few other criteria.

Seniors can get this refundable income tax credit even if they owe no income taxes! 

A Few Basic Criteria

This tax credit is based on property taxes you’ve paid (or that your landlord paid) in 2019, plus your sewer and water bills. Keep these requirements in mind:

  • You must be 65 or older this year to qualify.
  • Your primary residence, whether you own or rent, must be here in Massachusetts. 
  • Your earnings must be less than $60,000 for a single individual, $75,000 for a head of household, or $90,000 for married couples who file jointly.

For instance, let’s assume you’re single and earned $40,000 in 2019. You paid $3,000 in property taxes and $4,000 in water and sewer bills. Since your total eligible payments of $5,000 are greater than 10% of your earnings, you’ll qualify for the tax credit!

How Much Is the “Circuit Breaker” Tax Credit Worth?

According to the official Massachusetts state website, the maximum credit value is $1,130. Talk to a tax advisor about the exact credit amount for your unique situation.

Vargas & Vargas is a local, family-owned insurance agency. We provide competitive insurance products and tax services across Massachusetts. Reach out to us today if you’d like to learn more about our tax services or if you need a quote for homeowners or renters insurance.

Progressive vs. Geico Insurance

younger couple comparing Progressive and Geico insurance coverages

All insurers are not created equal, nor are all insurance policies. We’re not here to sling mud or speak badly about any insurance provider! But we are going to explain how every insurance company has an ideal customer in mind, and show you some specific differences between Progressive and Geico insurance policies as examples. Our duty at Vargas & Vargas Insurance is to connect every customer with the right insurance policy. We work with many major insurance companies, and we can help take the guesswork out of any of your Massachusetts insurance policies. As always, if you have questions beyond the scope of this article, reach out to us today.

About Progressive

Progressive is a well-respected insurer with an excellent reputation. Their ideal client is a multi-line household — in case you hadn’t noticed “Flo’s” focus on insurance “bundling” in their advertising campaigns. Progressive will insure your home and autos, and the company offers life insurance choices, too. They provide great coverages for adults with multiple insurance needs.

  • Progressive provides homeowners insurance in-house; they don’t farm it out. 

About Geico

Geico began as an insurance provider for government employees and gradually broadened their scope. Geico’s focus is providing economical pricing on auto insurance, though they also insure recreational vehicles like motorcycles and RVs. They usually have somewhat better rates for some riskier drivers, like those who have had many at-fault accidents, those with many speeding tickets, and young inexperienced drivers.

  • Geico does not write their homeowners insurance policies. They can provide you a quote, but they “farm out” the policy to a partner.

Our Perspective

At Vargas & Vargas, we work hard to match the right type of insurance policy to our customers. Both Progressive and Geico homeowners policies, for instance, will provide replacement cost coverage. Still, they offer different bells and whistles, as well as different rates. 

Both Progressive and Geico homeowner’s policies provide medical payments to others in case of injury, liability coverage, and coverage for water or sewer damages. However, Geico and Progressive recommend lower limits of liability and deductibles on glass coverage, where most insurance professionals do not. And both companies offer varying discounts (like paid-in-full discounts, paperless billing discounts, multi-line discounts, and so on).

The biggest benefit of working with an independent insurance agent like Vargas & Vargas is that our licensed, independent insurance agency works with many insurance companies. We know their underwriting criteria and know their ideal customer. Our goal is to spend time with each prospective client to get a feel for your insurance needs. Then we can move forward getting quotes from the best companies for your unique situation

Need some Massachusetts insurance quotes? Let’s talk!

What You Need to Know About Liability Insurance for Your Massachusetts Home

Liability coverage may be the least understood portion of a typical Massachusetts home insurance policy.  Other standard home insurance coverages — like dwellings coverage or personal property coverage — protect you from losses to your own property. In contrast, liability insurance protects you when you’re legally responsible for someone else’s losses.

How the Liability Portion of Your Home Insurance Policy Works

Liability coverage usually extends to you and family members who live in your household. You’re covered if someone sues you or a family member for causing certain injuries or property loss. Liability insurance pays expenses, such as the cost of your legal defense, court costs, and settlement fees (or damage awards). 

Examples of What Liability Insurance Can Cover

Your liability protection typically includes accidental injuries to someone visiting your home.  For instance, you’re covered if your guest gets hurt from falling on your icy porch steps.

You’re also covered for certain property damage and accidental injuries caused by you or a covered family member that happens away from your home. Here’s an example. Your child is playing baseball in a neighbor’s yard. He pitches the ball, and it accidentally hits the neighbor’s child in the head. The neighbor’s child is seriously injured. Your liability coverage takes care of your attorney’s costs and the settlement fee related to that event.

What Homeowners Liability Insurance Does Not Cover

Liability insurance does not cover intentional acts or injuries. Also, homeowners liability insurance does not cover losses related to the operation of a vehicle or business. You need auto insurance or business insurance for those costs.

Deciding How Much Liability Coverage You Need

For any type of insurance, the coverage limit is the maximum amount of money that the policy will pay out. The coverage limit for the liability portion of home insurance can be as little as $100,000. However, since the median home value in Massachusetts is $426,330, $100,000 is not enough coverage for most Massachusetts homeowners. 

You can and should increase your coverage limit to be equal to or more than your home’s value. Losing your home to pay a settlement fee or damage award is a possibility for homeowners who don’t have sufficient coverage. Contact us today so we can help you find a home insurance policy that has the liability coverage that meets your needs.

Understanding Homeowners Insurance: What Is Loss of Use Coverage?

happy couple planning home repairs

As Massachusetts insurance agents, the best part of our day is helping first-time homebuyers get a home insurance policy. It’s an exciting and stressful time for young families, and Vargas & Vargas Insurance is here to help.

If this is your first time shopping for home insurance (or if you’ve been a homeowner for years but haven’t read your policy), then it might seem a little overwhelming. We’re here to explain some important points about your policy, and why it’s crucial to have a strong insurance policy in place. In this article, we’ll discuss Coverage D, Loss of Use.

What Is Loss of Use Coverage/Living Expense Coverage/Coverage D?

A strong home insurance policy will protect your investment from a covered loss, like fire. 

Imagine your home was to burn down to the ground. If it’s a smoking pile of debris now, then you’ll need to rebuild your home from the ground up. Coverage D is there to pay for your living expenses elsewhere while you rebuild. It will cover things like:

  • Meals at restaurants
  • Hotel stays
  • Renting an apartment

All you need to do is let your claims adjuster know that you’re staying elsewhere and keep copies of all your receipts. 

Loss of use coverage will also protect you if you suffer a partial loss. Examples would include:

  • The city’s sewer system overflows while you’re gone on a business trip overnight. You come home to a basement full of raw sewage. So you can’t stay in the home — it’s a health risk. Coverage D will pay for your hotel stay and meals. 
  • Your neighbor’s house burns down completely, and one wall of your home is burnt and damaged. If you can’t stay in the home while a wall is replaced, then your coverage will pay for your living expenses somewhere else.

How Much Loss of Use Coverage Do I Have?

Loss of use coverage is based on a percentage of replacement cost (Coverage A). Most basic policies start at 10%. For example, a home valued at $200,000 replacement cost may have $20,000 coverage for loss of use. But every policy is unique, so talk with a licensed insurance agent to understand yours.

As a homeowner, you must understand which coverage you have and what each element does. Read your declarations page carefully, and give us a call at 617-409-0329 if you need a homeowners insurance quote today.

Does Your Renters Insurance Cover Your Side Hustle at Home?

A side hustle is an excellent option for most people to generate extra income. If you run a side hustle from your home, you may not have insurance to cover the business. Without proper insurance, you could find yourself at a loss if you get sued or if your property is damaged.

woman working on her side-hustle in her home office

Renters Insurance

Your renters insurance policy covers an extensive range of property inside your home. It can help you recover laptops, computers, tablets, projectors, and printers after theft or damage. Sometimes, renters insurance can cover items you keep outside and use for deliveries such as a bicycle. In some cases, you can cover your side hustle by adding a rider to your current policy.

However, there are exceptions. Most renters insurance policies cover items you use at home and not for business. Some policies might not extend to cover items used outside the home. For example, if you are a photographer with expensive equipment that you use outside the house, a standard renters policy might not help you.

If your policy provider chooses to cover property that you use for business, the limit might be lower than one provided under a business policy. When the business item you want to include in your renters insurance is not part of your current contract, talk to your provider about an endorsement.

How to Know When Your Side Hustle Needs Insurance

When you are considering finding separate insurance for your side hustle, there are several questions you should ask yourself. Those include:

  • Do customers come to pick products from your home?
  • Do you handle critical and private information?
  • Do you handle people’s children or pets?
  • Could anyone get sick as a result of your business?
  • Would a lawsuit leave you broke?

Commercial Policies

Let’s face it, your side hustle may be safe for now, but there is no assurance. When tragedy strikes, you need to be prepared. Finding commercial insurance for your business will provide better coverage than your current policy. There are various commercial policies available depending on the risks of your business.

Looking for Insurance?

To find the right insurance cover for your side hustle, contact Vargas & Vargas Insurance today!