How to Choose Your Car Insurance Deductible

Smiling couple in a new car

Your car insurance deductible plays a significant role in your price for auto insurance. But insurance is complicated, and many people don’t fully understand what a deductible is or why it matters.

Today we’ll explain car insurance deductibles with the first-time car owner in mind. Let’s get a few basic insurance concepts out of the way.

Massachusetts Car Insurance Basics

To register a car in Massachusetts, you must insure it with liability coverage. This protects other people — and their property — from damage you might cause by driving the vehicle.

But the state liability minimums don’t include any coverage for your property or your vehicle. For that protection, you will need “full coverage,” or a package that includes both comprehensive and collision coverages.

  • Collision coverage pays for damage to your vehicle in a crash.
  • Comprehensive coverage pays for things like vehicle theft.

When an accident does happen, your full coverage auto policy will help pay to repair the car. But you’ll be responsible for paying a deductible, too.

What Is a Car Insurance Deductible?

Deductibles are considered a type of co-insurance. They are a pre-set dollar amount that the car owner agrees to pay first, should an accident happen.

For instance, let’s imagine you have a $1,000 deductible on your auto insurance policy. During a brutal New England snowstorm, your vehicle slides on some black ice and crashes into a center divider on the highway. Thankfully, everyone is wearing a seatbelt. No one is injured, and no other cars are involved.

You take your car to the shop, and it will need about $5,000 of work. With a $1,000 deductible, it is your responsibility to pay the first $1,000. Your insurer pays the remaining $4,000. 

  • Deductible amounts can range anywhere from $50 to $5,000.
  • But $500 or $1,000 are probably the most common amounts. 

If you have a high deductible — like $5,000 — then you’ll have a lower monthly insurance payment. However, you must keep $5,000 on hand at all times to pay for repairs yourself. And don’t forget that your lienholder — the bank, if you make a car payment — might require a deductible of $1,000 or less on your insurance. 

Learn More With Us

Vargas & Vargas Insurance is proud to be your local independent insurance agency. We work for our customers, not the insurance companies. Contact us today to customize your car insurance coverage and learn more about car insurance deductibles.

It’s Time to Update Your Life Insurance Policy

woman at home updating her life insurance policy during the fall

The winter holidays are just around the corner. Autumn is a great time to check on your life insurance policy. Suppose you need to update billing or beneficiary information, or you want to increase or decrease coverage. Handle your insurance maintenance now before getting busy with holiday cheer. The professional team at Vargas & Vargas Insurance is here to help. 

COVID-19 Caused Changes in Life Insurance for Massachusetts Residents

As reported by the Patriot Ledger, the pandemic led to business closures, layoffs, and furloughs for many MA residents, particularly in the service and hospitality industries. If you were forced to find new employment, you lost your company-sponsored benefits. If those perks included life insurance, it’s time to buy a new policy — especially if you’ve purchased or sold a home. 

The Massachusetts Real Estate Market Exploded in 2021

Thanks to the “white-hot” Massachusetts real estate boom of 2021, there’s a good chance you’ve bought or sold a home. You can learn more about homeowner’s insurance in another article, too.

If you bought a home in 2021, it’s time to:

  • Buy a term life policy to protect your spouse or partner and pay the mortgage if tragedy strikes.
  • Buy a whole life insurance policy that will build a cash value in a few years (you can borrow those funds later for emergency home repairs)

If you downsized in 2021, it would be a great time to put some extra funds in an annuity. Then you can safeguard it for retirement. 

Finally, even if you’re not interested in buying a life insurance policy right now, it’s always a good idea to check on your contact information and beneficiary information. Make it a fall tradition!

We’re Here to Help

Vargas & Vargas agents are proud to serve businesses and residents of Massachusetts. We work for our customers, not the insurer. So contact us today to learn about life insurance products that fit your current needs, whether that means protecting your family or saving for retirement. We’re standing by to answer all of your insurance questions. 

Do Landlords Need LLCs or Good Umbrella Coverage for Real Estate Investments?

landlord handing keys to new tenants after protecting their business with umbrella coverage

Are you a real estate investor looking to protect your assets? Chances are you have been using an LLC or an umbrella insurance policy to keep away from liabilities that may affect your property. They are both practical to use, but there are cases where either an LLC or umbrella coverage for real estate investments is the better option.

You can make the right choice by understanding how they protect your property. There are various cases where many investors don’t understand the implications of LLC and umbrella policies. Let’s break it up!

Why You Need an Umbrella Policy

An umbrella policy is an insurance cover that adds other liability coverage to an existing insurance policy. Adding more coverage to the current coverage protects landlords against personal fiscal responsibility when cases such as injury or lawsuits occur.

The umbrella coverage for real estate investments travels with you. The policies cover personal circumstances, such as when your dog bites someone at the park; the cover also helps with medical costs.

Why You Need LLCs and Corporations

An LLC, or Limited Liability Company, helps protect you from any liabilities that can arise within the LLC that prevent the plaintiff from suing you personally. In the case of a lawsuit, the only thing at risk is the business’s assets, leaving the owner out of the puzzle.

The creditor may decide to collect the assets of the business. It is different from state to state, and you have to consult your agency and understand the laws behind it.

Choose What Is Best for You

The choice you make between the two depends on the real estate portfolio. For example, the umbrella insurance policy is best for making the right financial choices for landlords with small portfolios. You may also opt for both an umbrella insurance policy and creating an LLC since they work effectively.

Vargas and Vargas Insurance is among the best local independent insurance agencies in your neighborhood. We offer expert and customized services that cater to your specific needs, so contact us today.

Homeowner’s Guide to Lender-Required Flood Insurance in Massachusetts

couple looking out the window at the rain while having flood insurance in Massachusetts

Many residents in Massachusetts don’t realize that flood insurance can help protect them from financial devastation in cases of floods. Flooding can quickly cause over $100,000 worth of damage to your home. However, if you have flood insurance in Massachusetts, you can receive reimbursement for your losses minus your deductible amount.

If you’re wondering how flood insurance works or if it’s something you should consider for your home, keep reading.

How Flood Insurance Works

The National Flood Insurance Program (NFIP) and some private insurance companies issue flood insurance. Private insurance companies offer lower premiums as compared to government affiliates. These insurance policies are available for Massachusetts residents living in designated flood areas.

This insurance plan offers policies for losses sustained by floods in homes and businesses. Flood insurance policies typically have waiting periods before coverage takes effect. However, once you subscribe to their policies, you are assured compensation in cases of floods.

Why Do Lenders Require Flood Insurance?

One of the most significant risks you can take is buying a house in a flood-prone area. Because of this, many lenders require applicants to purchase a basic flood policy. They will also evaluate your property’s situation based on the history of flooding, how the structure stands, and the risks inherent in living in floodwaters.

What You Need to Know About Flood Insurance in Massachusetts

If your home is in a high-risk area, purchasing a policy could pay off. You may reduce or eliminate your premium by switching to a cheaper policy with lower premiums. In addition, insurance provides a mechanism for immediate financial help if flooding destroys your family’s home.

It prevents you from being held responsible for paying more than necessary to repair or replace your damaged property. Get the best quote on flood insurance from Vargas and Vargas Insurance. Even if you are not in a federal flood zone, you can purchase flood insurance at a better-priced premium. This will ensure that you don’t receive charges for more than what it costs to maintain the policy.

Final Thoughts on Flood Insurance in Massachusetts

The U.S. government has placed a flood zone designation on over two million homes in the country. This also applies in states like Massachusetts. If you’re looking for flood insurance, Vargas & Vargas Insurance is the right place. We will help you find the best policy for your needs and answer all your questions about the coverage. Contact us today.

What You Need to Know About Directors and Officers Insurance in Massachusetts

A board of directors deciding if their organization needs directors and officers insurance

Managing a corporation is complex and comes with various risks. Directors, officers, and condominium trustee boards are held responsible for decisions they make on behalf of their companies. This can lead to errors, mistakes, and poor choices, resulting in the company leaders getting sued. Directors and officers insurance is special professional liability insurance that covers past, present, and future leaders.

Shareholders, employees, customers, and others can also sue the directors or officers of a business. Therefore, anyone in these positions in the company requires coverage regardless of the size of the organization they lead.

How the Massachusetts Insurance Policy Works

The board of directors in any corporation represents the best interest of the shareholders in their organization. Failure in doing so may lead to lawsuits that will not be covered under a standard general liability policy.

Massachusetts state laws protect nonprofit board members who serve voluntarily for specific situations. However, such members must still work closely with a qualified attorney if such lawsuits are filed.

Policy Options and Additional Coverage

There are certain limitations and exclusions that the directors and officers face with this insurance policy. So it would help to talk to your agent, who will help you determine the most suitable policy to use in consideration of the unique needs of your corporation.

Also, try to include additional coverage that caters to cyber-attacks. Malicious attacks have been on the rise, and many businesses in Massachusetts will likely fall victim to such attacks. So buy D&O insurance to keep your board of directors safe and enhance your company’s reputation.

Protect Your Decision Makers With Directors and Officers Insurance in Massachusetts

Vargas & Vargas Insurance is a top local independent insurance agency in Massachusetts. We provide quality insurance coverage that suits your unique business needs at affordable prices, so talk to our top-rated customer care desk for all your insurance questions. Contact us here and engage experts today.

How to Decide How Much Homeowners Insurance You Need

homeowner calculating the replacement cost of her home as she determines how much homeowners insurance she needs

Figuring out how much homeowners insurance you need to cover your home and belongings can be challenging. But there are steps you can take to determine what types of insurance you may need and how much you should purchase. Here are some tips for calculating how much homeowners insurance will meet your needs.

Determine Local Risks

Most homeowners insurance plans cover:

  • Basic storm damage
  • Interior water damage from burst pipes
  • Fires
  • Other types of damage that any homeowner could sporadically experience.

But most homeowners insurance policies do not automatically extend to severe flooding from hurricanes or other types of natural disasters that do not affect homeowners in all parts of the country. 

For this reason, you will need to assess what specific issues your home may be prone to based on your location. Then you can determine whether you need to purchase extra policies, such as flood insurance, on top of your regular homeowners insurance policy. 

Determine the Overall Value of Replacing Your Home

Knowing approximately how much replacing your home would cost if it were completely lost is also important. It’s another key to determining how much homeowners insurance you should have. This should include the value of your home itself and your possession. It should also include any costs associated with having your home rebuilt. 

This information can generally be determined by this formula: multiply the square footage of your home by the approximate cost to rebuild per square foot. But this formula is not always accurate. Other factors to consider that may help you come up with a better estimate include:

  • The materials used to build your home
  • Any improvement projects you may have done over the years
  • Any vintage or other unique features your property has

At Vargas & Vargas Insurance, we prioritize protecting you and your property. We don’t work for your insurance company. Contact us today to learn more about how we can help you determine how much homeowners insurance you need to keep your home and property adequately covered without overpaying.  

Why You Should Avoid Private Mortgage Insurance

couple moving to a new home and researching how to avoid private mortgage insurance

Private mortgage insurance (PMI) is an extra type of insurance your mortgage company may require you to pay for if you are unable to provide the full down payment the mortgage company requires. That minimum is typically around 20 percent of the total value of the home. Unlike a good home insurance policy, private mortgage insurance is not an ideal option for many new homeowners. It results in significant wasted money and includes few benefits. 

Private Mortgage Insurance Is Expensive

Suppose your reason for considering private mortgage insurance is being unable to afford a 20 percent down payment on your new home. In that case, the last thing you want to deal with is an extra type of costly insurance. This will significantly increase the overall cost of your home over time. Most private mortgage insurance costs between 0.5% and 1% of the total value of your home. This can average $1,000 or more per year. 

Depending on where you live, this average can rise well over $3,000 per year. This is in addition to your regular homeowners insurance. 

It’s Difficult to Cancel

Private mortgage insurance also tends to be more difficult to get out of than other types of insurance. You are technically only supposed to need to pay for private mortgage insurance until your total equity reaches the 20 percent that you might have otherwise paid as a full down payment on your new home. But  some contracts require payment for a specified period of time. This can happen even if that time is longer than you need to meet your 20 percent obligation. 

Contracts may also require a formal letter, appraisal of your home, or other documentation to have your cancellation approved. This can take months to complete. It might also require you to pay for your private mortgage insurance for longer than you would otherwise need to. 

Private Mortgage Insurance Is Not Deductible

As of 2017, private mortgage insurance is no longer tax-deductible, which means you will lose more money to taxes. 

At Vargas and Vargas, we work for you and not your insurance company. So contact us today to learn more about how we can help you avoid purchasing private mortgage insurance and explore options you may have for handling your homeowners insurance needs at the best possible cost. Also, visit our blog to learn more about getting the most out of your homeowners insurance

Dorchester, MA Insurance for Gap Coverage (Umbrella Insurance)

Vargas & Vargas Insurance hopes your family is doing well as you journey through life in Dorchester, MA. But, for those times when life is rough, that’s what an umbrella is for. 

Umbrella insurance may not be as well-known as other types of insurance, but it is very important if you want to make sure you have the coverage you need for life’s unexpected surprises. Umbrellas cover you when the rain comes. And let’s face it: you never know when that rainy day might come your way. 

Let’s say you are in an auto accident. Your coverage is $25,000 per individual, perhaps. But the problem is, the person you hit on the way to get groceries owes $30,000 in medical bills. If your personal liability is only $25,000, you now owe an additional $5,000 in out-of-pocket expenses!

That’s where umbrella insurance comes in!

More About Umbrella Insurance

Also known as "gap insurance," umbrella insurance covers more than the limits of your insurance and kicks in where your normal coverage leaves off. If you are threatened with a lawsuit due to not carrying enough insurance, your umbrella insurance can help you out a lot. Avoid the possibility of lawsuits by increasing the amount of your insurance in the most risk-prone areas of your life. 

Dorchester MA Insurance Source

If you are in need of extra coverage for auto, business insurance, house insurance, or other kinds of insurance, see the professionals at Vargas & Vargas Insurance, covering the Dorchester, MA area. They can show you the types of coverage you need and how much umbrella or gap insurance you need to restore your peace of mind. 

The Smartest Home Insurance Deductible Move

Do you know that you can save hundreds of dollars on your yearly home insurance bill by simply increasing your home insurance deductible? By this, we don’t mean changing from $500 to $1,000. We want you to think bigger: $2,500. Opting for a low deductible is a characteristic mistake. Read further to understand why.

1. Lowered Monthly Premiums

For home insurance, a higher home insurance deductible means that you will be paying low premiums. A lower deductible, on the other hand, equals high monthly premiums. Therefore, the most effective way to lower your premiums is to increase your deductible.

2. Increased Premium Savings

A great way to save money on your insurance is to review your deductibles. There is an inverse relationship between your cost of deductibles and your cost of monthly premiums. One way to look at this is to make a comparison of your potential savings over several years against the additional out-of-pocket risk you incur. While this is by no means a definite way to make a decision, it is an important piece of information to help you measure your risk trade-off. 

3. Higher Deductibles Mean Fewer Claims

You could raise your deductible to avoid making many claims.  Your premiums increase each time you make a claim. You most likely do not want to make claims for small losses. Therefore, it is in your best interest to get a higher deductible, so you are only worried about paying up for major disasters or larger claims.

Your home insurance deductible should be the amount of money you are comfortable paying in case your home is damaged. We recommend having a minimum of $1000, but you might increase this to access long-term savings. 

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 we are also here to answer all of your insurance questions. Contact us today.

10 Things to Do Before Moving: Your Moving Checklist

family moving into a new home

Moving is stressful, and you may end up forgetting something in the process of moving. So here is a quick moving checklist to ensure that you take care of everything in your home as you move.

1. Prepare for Your Move Early

The first thing you have to do is prepare early for your move.  No matter the time of the year, getting a reputable mover can be hard. Early preparation will help you get through the weeks with less stress. 

2. Choose a Mover

Unless you want to self-move, you should look for a professional mover.  Look for reliable and experienced movers. If any of your friends and family have used a mover before, you can ask if they can recommend one. 

3. Pack All Your Items Boxes

Start putting the items you use less often in a box. This can include books, Christmas decorations, croquet sets, and seasonal articles.

4. Clean the Rugs and Draperies

Make sure you clean your rugs and draperies before moving to your new home. They will be returned wrapped. Don’t take them out of the wrap until you reach your new location.

5. Get a Written Appraisal of Your Antique Items

Make sure you note the prices of all your appraised items, such as antiques. These items need additional insurance from the moving company.

6. Book the Moving Elevator

If you’re moving to an upper floor, make sure you book an elevator. By doing so, you’ll reduce the hassle for the people living in that apartment. It’s also advisable to confirm the parking for a moving truck and get permission early.

7. Switch Utilities

Have the utilities in your old home disconnected the day after you move. You should also make sure that you cancel your home internet, phone, newspaper service, and even local club memberships.

8. Contact Your Insurance Company

You’ll also have to change your insurance when moving. So get in touch with your insurance company to transfer your policies.

9. Request for Time Off of Work

If you are moving out on a weekday, then you need to take time off work. If you can’t get time off, you can arrange with your friends or family to meet with the moving company.

10. Address Minor Home Repairs

Once you find time, you should do minor home repairs before you move out. This is especially important if you’re selling your home.

At Vargas & Vargas Insurance, we’re here to help as you move to your next home. We provide customized insurance coverage to meet your specific needs and budget, and we are also always available to answer all your questions about insurance. Our team will work for you and not the insurance company. Contact us today as part of your moving checklist.