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.

Jewelry and Gem Valuations: GIA or Bust!

As Massachusetts insurance professionals, the licensed agents at Vargas & Vargas Insurance are here to make sure your risks are covered. Part of that mission is to educate our customers about the importance of credible paperwork. Today, we’re talking specifically about worthless jewelry valuations and fake appraisals.

older woman giving her adult granddaughter heirloom jewelry

In January 2020, Jewelry Insurance Issues published this article, making all of us in the industry aware that AGA, the “Accredited Gemologists Association” logo has been ripped off and is being used on bogus jewelry certifications. The alarming thing is that AGA isn’t even a gemology lab! It’s a non-profit club whose mission is to provide networking between jewelers, gemologists, and material sources.

So which certificates can we trust? 

Diamond & Jewelry Certifications We Can Trust

The most respected diamond or gem appraisal will come from the Gemological Institute of America, or the GIA. Jewelers and investors around the globe trust GIA above any other source. Many investors and insurers will only accept GIA paperwork. There are a few other sources available for certifications, however, including the following:

  • The retailer or manufacturer may provide a gem certificate when you purchase the piece. These are to be taken with a grain of salt. Some insurers will write a personal articles floater (the type of insurance associated with a fine piece of jewelry) based on this certificate. Others will not. 
  • A professional appraisal from a certified gemologist may also appease an insurer.
  • The International Colored Gemstone Association (IGA) also offers gem certifications. Their reputation isn’t illustrious, however, so an insurer or collector might not accept them.

Personal article floaters (PAFs) for jewelry are written on a case-by-case basis. If you believe your ring is worth $25,000, the best thing you can do is send it off to GIA (through a related jeweler) for a genuine lab report. As of 2020, GIA lab inspections cost around $500 for general consumers, but a GIA certified jeweler can have them done at a third of that price.

The process takes three weeks. Afterward, you’ll have irrefutable evidence of your gem’s value.  

Jewelry Scams Happen

Gem and jewelry “fakes” and “cons” have been around for centuries. If you’ve been conned into buying a fake gem, know you’re not alone. Sometimes a gem can be innocently mislabeled, as in the case of the Black Prince’s Ruby, which is a spinel set in the imperial state crown of England. Yes, the highlight of the crown is an imposter! If your lab report comes back describing your gem as a simulant, lab-created, or of much lower quality than you thought, you may have some options. Speaking directly to the jeweler is your first course of action. A good jeweler will do their best to fix the situation. 

If you purchased your piece from an online retailer or auction house (eBay), you might have protections in place via PayPal or your credit card. The good news is that you won’t be paying to insure a fake!

We hope you’ve enjoyed our discussion of bogus gem reports. We sure enjoyed writing it! If you’d like to learn more about insurance for your most cherished heirlooms, email one of our agents today!

How to Protect Your Personal Assets When You’re a Landlord

Let’s say that you inherit or purchase a house and end up with two properties. At this point, you have some very big decisions to make. You can sell the extra home or use it as a rental property. Either choice can have immediate benefits, but with rental properties, you have risks as well. These risks may include lawsuits and claims for personal injuries or damages to your tenants. Therefore, before you decide to start your new job as a landlord, we suggest you prepare for the ‘what-ifs.’ You need to know how to protect your personal assets when you’re a landlord. 

homeowner evaluating how to protect his rental property on his home computer

Understanding Your Risks as a Landlord

There are some things that you cannot be held liable for as a landlord. If your tenant suffers a personal injury while jumping on a trampoline that they brought on the property, you most likely will not be held accountable for it. This is especially true if you were unaware that they had a trampoline or you felt that they were grown up enough to play safely while on it. 

The problem arises when you, as a landlord, know that there is a risk of danger to the property or the people who are renting from you. For instance, you may be held liable if:

  • You know that dangerous animals or pets are nearby.
  • You are aware of improper maintenance, water damages, or faulty wiring issues and fail to repair them.
  • You know that criminal activity in the area creates a risk for the personal safety of your tenants.
  • You are aware that the home is in violation of local laws or building codes.

As a property owner for a rental property, you have to fix the issues that you know are there. The shortlist above is only a few of the things that you could be held accountable for. 

How to Protect Your Assets as a Landlord

To protect yourself, you must put effort into securing your personal property. This can be done in several ways. Some of the most common include:

1. Create an LLC for Your Business

The term LLC means that you are a limited liability company. Many homeowners don’t think about the fact that they are a business when they become a landlord, but it’s something to consider. LLCs give you protection from potential problems. The term LLC basically gives you a buffer so that a tenant cannot go after your personal assets — just the business’s assets. 

2. Hiring a Skilled Property Management Company

When you have rental properties, you may not know all that you are responsible or accountable for. A property manager can help you sort through applicants, avoid fair housing violations, and more. They have a full understanding of what is involved and can help you ensure your property is operating legally in every way. 

3. Limit Potential Areas of Liability

If you know that there is a particular risk involved with the property, do everything you can to lessen it. For instance, if you know there is a family of feral cats roaming near your property, contact animal control to help you catch them. Remember that storm last year? If there is any chance that it caused roof damage, have the roof inspected before you rent it out. The more prepared the property is, the safer you will be.

4. Protect Your Assets with Insurance Coverage

When you have a rental property, you need to protect yourself with proper insurance. The minimum protection for you should come from adding a rider or extension to your home insurance. It can help you cover the cost of something going wrong with your rental property. An umbrella policy may also be wise since it can protect you from possible lawsuits.

Along with this, it is important that you inform your tenants that your policy does not cover them. They should purchase their own insurance to protect their personal property. 

If you would like more information on your options as a landlord and protecting what is yours, we are here for you. You can contact us anytime for a quote. Vargas & Vargas is also available via phone calls or text. If you need help during business hours, call us at 617-298-0655.

Making an Informed Choice About Accessing the Cash Value of Your Life Insurance Policy

It’s important that you’re well-informed before you access all or part of the cash value of your life insurance policy. After all, you took out the policy to provide for your survivors. That’s why the agents at Vargas & Vargas Insurance work hard to have the answers our clients are looking for. You need to know what impact accessing these funds could have on their future and your own. 

couple sitting in their house and discussing life insurance policy options

Life Insurance Policies that Accrue Cash Value

Cash value life insurance policies are sometimes referred to as permanent life insurance policies. This category includes whole life, universal life, and variable life. One of the biggest differences between these policies and term life insurance is that the latter policies do not accumulate cash value.

Common Ways to Access Cash Value

Policy Loan

Benefits: The life insurance company may offer you a lower interest rate than you can get with a conventional bank loan or by taking a cash advance on your credit card. A policy loan does not qualify as taxable income. You’re typically not required to repay the money since you’ve basically borrowed your own funds.

Drawbacks: However, policy loan repayment is to your beneficiary’s advantage. After death, the insurer usually deducts the amount you borrowed and the accumulated interest from the death benefit.

Withdrawal

Benefits: When the amount withdrawn is not greater than the total of paid premiums, the withdrawal is not taxed. The rules governing a withdrawal depend on your policy. Some policies allow dollar-for-dollar withdrawals.

Drawbacks: With other policies, a withdrawal reduces the death benefit by an amount greater than what the policyholder withdrew.  Withdrawals that exceed premiums paid are usually taxed.

Policy Surrender

Benefits: You’ll receive the policy’s cash value. 

Drawbacks: Your insurer may charge a surrender fee. If you owe any debt from policy loans, the insurer also subtracts your debt from your cash value. Generally, the income from a policy surrender is taxable. Most importantly, you’re effectively canceling the policy. Your survivors will not receive a benefit from the policy.

We’ve provided this information as a general introduction to accessing the cash value in your life insurance policy. If you have specific questions about life insurance policies, contact our team for assistance.

Should I Buy Earthquake Coverage?

At Vargas & Vargas Insurance, our job is to provide the right insurance policies to protect your investment into your home and to protect your family and belongings. Today, we’re talking about earthquake insurance. Before we get any farther, we should point out that most dwelling policies don’t include earthquake coverage. In other words, if a huge 8.1-magnitude earthquake were to rumble through Massachusetts and toppled your home to rubble, you would not be covered with a standard homeowner’s policy.

mother and daughter inside a kitchen

Earthquake coverage is a rider that can be added to any home insurance policy. It’s worth the money if you ever experience a significant loss, and it’s certainly worth the peace of mind.

Does Massachusetts Experience Earthquakes?

Yes! According to the Northeast States Emergency Consortium (NESEC), the state has felt 408 earthquakes over the last 450 years. That’s almost one per year on average. Earthquakes occurring in surrounding states, and even as far as Quebec, Canada, have been felt in Massachusetts, too. 

Even though our earthquake history in recent years isn’t as scary as in other states like California, Massachusetts homeowners are always at risk of earthquake loss. Preparing for one now can protect your home later.

On Home Valuations and Earthquake Deductibles

Earthquake insurance is written based on the replacement cost of your home, not the purchase price or property tax valuation. In other words, your company will insure your home based on what it will cost to build a new home from the ground up, just like through your general homeowner’s policy.

However, deductibles work differently with earthquake insurance. You can choose your deductible to be 5%, 10%, 15%, 20%, or 25%. It’s vital that you understand these deductibles as they relate to a loss.

For example, let’s say your home replacement cost is $250,000. A 10% deductible is $25,000. Earthquake insurance won’t come into play for a small loss. If a small earthquake occurs and breaks all your dishes and some windows, the damage won’t be more than your deductible of $25,000. However, if your entire home were to turn to a pile of rubble, you’d be entitled to a check for $225,000.

Ultimately, the choice to insure your home against earthquake damage is entirely up to you. It’s an affordable addition to any homeowner policy, but it’s important to choose the right coverage for your specific property. Reach out to a licensed insurance agent at Vargas & Vargas Insurance today to learn more.

To Escrow or Not To Escrow?

Many Homeowners have an escrow account for their mortgage payment. The purpose of the escrow account is to maintain a balance of funds the mortgage lender uses to pay bills on behalf of the Homeowner such as property taxes and insurance.

Many other Homeowners do not have an escrow account, even if they have a mortgage; they pay their own taxes and insurance directly.

Not every mortgage program requires that a Homeowner maintain an escrow account.  The general rules are the following for an escrow requirement:

  • Down payment less than 25% at time of purchase
  • Government Insured mortgage (FHA, VA), regardless of down payment at time of purchase

If your mortgage is not a Government-insured mortgage, and your down payment is less than 25% you still have the option to request a “waiver” of the escrow account requirement. Sometimes a lender will charge a premium—usually in the points paid—to waive the escrow requirement.

There is one primary benefit to having your property taxes and insurance included in an escrow account.  This is the monthly budgeting benefit.  Since the taxes and insurance escrow is included in your mortgage payment, then the mortgage payment is the only budget item you need to plan for.  

But there’s an important negative aspect to an escrow account.  The “set it and forget it” mentality that can easily set in.  That is, since your Homeowner’s insurance is included in your mortgage, many Homeowners not only forget to review their insurance on an annual basis to determine savings on premiums, but these same Homeowners often have no idea of the amount of their annual insurance premium, including when the premium increases.

If you have the opportunity to remove at least your Homeowners Insurance from your escrow account, you should do so.  This control allows you to discuss your insurance twice every year with your Independent Insurance Agent to lower your premiums and to take advantage of any developments that can improve the quality of your insurance coverage. 

The process to remove your Homeowners Insurance from your escrow account can be difficult but is worth the effort.  Contact your mortgage servicing lender today to find out if this option is available to you.

Archive Revival: Why Is Renter’s Insurance Important?

Most people fall into one of two categories: They either own their home or they rent it.

If you rent your home, you don’t need a homeowner’s insurance policy.

You need what’s called renters insurance. This type of insurance policy will ensure that you have the right coverage when you need it the most.

We’ve outlined below how homeowner’s insurance and renter’s insurance are similar and and how they differ. Here is our quick summary:

Property Protection

When you rent your home, you don’t own the physical property. As a result, you are not responsible for insuring the property. Instead, the insurance policy is the responsibility of the property owner.

This means that if there is damage to any part of the exterior and interior of the property including walls, ceilings, floors, doors, or windows, you are not responsible for filing or paying for an insurance claim.

Coverage for Belongings

Similar to a homeowner’s insurance policy, a renter’s insurance policy provides coverage for your personal belongings. You need to take inventory of your belongings to give an estimate on what it would cost to replace your belongings.

When you make your home inventory, make sure that you include everything that you own, including items like electronics, furniture, clothing, and jewelry. Also include any of your own personal appliances that are not owned by your landlord or apartment complex. That way, all of your stuff will be protected against perils like fire, smoke, theft, water damage, and more.

We recommend keeping the receipts of high valued items. We also recommend storing photos of each of your rooms so you have documentation of your belongings. This will help to ensure that you are covered in case of a total loss, but aren’t overpaying for coverage that you don’t need.

Reimbursed Living Expenses

If something happens to the place where you live, your renter’s insurance typically covers your living expenses for a comparable place until the damage is repaired and your home is once more inhabitable.

If your rental home or apartment is destroyed or deemed uninhabitable, call your insurance agent right away to find out what you should do so that reimbursement is allowed.

Liability Insurance

Another type of coverage that is typically included in both renters and home insurance is liability insurance. With this coverage, you are financially protected from the costs that rise if someone is injured at your home.

Depending on your insurance provider and the policy that you choose, this can include both medical costs and legal costs, which can get very expensive, depending on the injury sustained.

As always, all of the information above depends on your insurance provider and your specific policy.

We search several insurance providers to find the one that will give you the best coverage at a price that works for you and your budget.

Cost?

On average, the cost of a renters insurance policy is $120.00 per year for $10,000 of contents, including loss of use and liability coverage, Click here for more details) in Massachusetts.

If you package your automobile insurance policy with your renter’s insurance, most times, the savings by doing so more than covers the cost of the renter’s policy.

If you have any questions about the coverage included in your current policy, or if you need a new top of the line renters insurance policy quote, please call 617-298-0655 to speak with a representative here at Vargas and Vargas Insurance Agency.

Managing Growth

Growth can sneak up on us.  Whether it’s your family or your business, one day you realize you’ve grown larger than when you started. 

  • Two cars when once there was one.
  • Five employees when previously you had two. 
  • A new spouse when you once lived alone. 

Growth is a good thing, it’s the keeping-up-with-growth that’s difficult.  Unless you’re organized and prepared, then growing becomes easy-peasy.

One area we often overlook, when growth occurs is whether it sneaks up on us or we prepare for it, is with our insurance.

Here’s where your Independent Insurance Agent comes in. We help your growth spurt feel smooth, organized, and best of all, prepared for any happenstance.

We often advocate that our clients undertake an annual review with us to see what coverages best suit their needs with natural changes over time. This helps to ensure quality coverage at an affordable cost whenever possible.

Our facility as your Independent Agent is there for you to advocate and manage when the “growth” word pops up.  Not only can we find the right insurance coverage for your new larger family or business, but we can help you control the costs of that insurance. 

Call us today so we can discuss all of your wonderful growth opportunities and reduce any growing pains so you experience the best possible insurance solutions.

You can reach us by calling 617-298-0655 or text us at 617-409-0329 for a free, no-obligation annual review. Click here to Visit our Contact Us page.

Fire Hazards in Your House

Fire hazards are everywhere. Yet, we often ignore the danger, or, worse, we’re completely unaware of the lurking, imminent threat of fire breaking out.  Fire is a devastating event, inflicting tremendous damage, sever injury and death!  Fire can wreak havoc in a fierce, fast, moment.

Smoke detectors are your primary line of defense to protect your life when a fire breaks out.

But you should take the time to carefully inspect your home for hazards that could easily become a threatening event.

Extension Cords 
Overloaded electrical extension cords cause fire by overheating and exploding in flame. Additionally, they are often near to furniture or draperies that burn rapidly. 

Take time to unburden your electrical outlets from overloaded extension cords.  If you absolutely must increase utilization of a particular outlet in your house, consider hiring an electrician to upgrade the wiring and quality of that outlet. Install of an outlet with a “Ground Fault Interrupt” (GFI) breaker that shuts the outlet off in the event of overloading.  

Consider purchasing a high-quality surge protection power strip with built-in circuit breaker.

Coffee Machines
Does your coffee maker have an “Auto-Off” feature?  We forget to turn off coffee machines; they continue warming the near-empty carafe, ultimately burning off any remaining liquid, thus creating a fire hazard while you’re away from home.

Circuit Breaker Panel Upgrade 
When is the last time you asked a Licensed Electrician to inspect the circuit breaker panel in your house to determine its viability for your current needs?  A simple inspection and potential upgrade of worn or insufficient breakers can go a long way to presenting a first line of defense against fire hazards.

Lightning
Do you have a lightning rod installed on your home?   The lightning rod is a simple metal bar that captures a lightning strike and sends the resulting electrical burst harmlessly away from your roof.

Inspect all electrical outlets
Be sure there’s no furniture, clothing, newspapers or other flammable objects too close to, or obstructing the electrical outlets around your home.  A flimsy fabric accidentally falling on the electrical cord to a lamp can potentially overheat and create an immediate fire situation.

You can find more excellent advice on inspecting and protecting your home at the National Safety Council website.

Call us so we can help you with other claim prevention tips. You can reach us by calling 617-298-0655 or text us at 617-409-0329 for a free, no-obligation annual review.

Click here to Visit our Contact Us page.

5 Ways to Reduce Your Insurance Costs. #3 Will Blow You Away!

Saving money isn’t a responsibility you should hand off to someone else, especially if that someone else is the insurance company. 

Knowledge is power.  With these 5 tips, you’ll have the power you need to negotiate lower premiums with your insurance carrier.  Take back the responsibility and own your power!

  1. Take a defensive driving class. Providing proof of your renewed defensive driving class will save money. In some states for 3 years.
  2. Shop for other carriers.  You should speak with your Independent Agent at least annually to see if your current carrier and other insurance carriers can offer lower premiums on the same (or higher) coverages when available.
  3. Reduce your coverage as your car gets older. Because you’re reviewing your policies annually, you can discuss updating your policy based on the advancing age of your vehicle. Collision can be expensive and may not be required.
  4. Increase your deductible.  Look for the perfect equilibrium between the affordability of a larger deductible and lower premiums.
  5. Bundle your auto coverage with your Homeowners and Umbrella Liability policy.  Can you say “Multi-Line Discount?” 

These five simple steps can help you save hundreds of dollars in a given period of time.  All it takes is a few minutes to own your power and make the call!

Speaking of calling…call us today to learn about saving money on your insurance portfolio. Your piggy bank will thank you and so will we!

You can reach us by calling 617-298-0655 or text us at 617-409-0329 for a free, no-obligation annual review. Click here to Visit our Contact Us page.