Every location has its own practices when it comes to insurance premiums and what affects them. In this case, I’m talking about the insurance surcharge you could face after an accident in Massachusetts. Today, I break down the steps for the appeal process and why it’s important.
What is an Insurance Surcharge?
A surcharge on your insurance is a fee that is added to your premiums. This usually happens if you’re regularly involved in at-fault accidents, pay your premiums late, or have a lapse in coverage.
However, a surcharge can also affect your insurance if you’re simply adding another vehicle to the policy. In those cases, though, you can work with the insurer to see if there are discounts available for multiple-car policies.
In this article, I’m focusing on appealing the insurance surcharge that comes after an accident.
Steps to Appeal the Insurance Surcharge
The insurance surcharge will kick in if the insurer deems that you are more than 50% at fault. According to Massachusetts law, you have up to 30 days from the notice of the surcharge to file an appeal with the Division of Insurance Board of Appeal.
1. Complete and submit the Appeal Form that is located on the backside of the Notice of At-Fault Accident Determination. You’ll need to enclose the $50 filing fee made payable to the Commonwealth of Massachusetts. The address is located on the Appeal Form.
2. You will receive a notice in the mail acknowledging the receipt of your appeal.
3. In approximately three weeks, you’ll receive a hearing notice. At this hearing, you can attend yourself, submit a statement at least five days before the hearing, or have a representative appear on your behalf.
4. The hearing will last around 15 to 20 minutes to determine the justification of the surcharge.
5. About two to four weeks after the hearing, you’ll receive a decision from the Board of Appeals as to whether the insurance surcharge will remain.
Note: If the surcharge is added to your insurance premiums, you’ll still have to pay the additional amount. Otherwise, the insurer can cancel your policy.
How Much Will Rates Increase if You Don’t Appeal?
The increased amount of your insurance premiums will depend on a lot of factors. It’s not exactly a one-size-fits-all answer, to be honest.
For example, rate increases are subject to:
your previous driving record.
how many years you drive that are accident-free.
how often you file insurance claims.
Essentially, it all comes down to how much of a risk the insurer deems you for coverage. If you have a spotless driving record and make your payments on time, the increase might be nominal.
Use the Appeals Process Correctly
The appeals process is meant to help the innocent avoid paying out when accidents were clearly not their fault. As long as you explain your position to the magistrate, and are not at fault, you may avoid these extra fees.
At Vargas & Vargas Insurance, we can help you further understand the process and what you need after an accident. Contact us today to understand your options and what you can do to avoid issues like this in the future.
Auto insurance is not only necessary to financially protect you in the event of an accident, but it’s also the law when you’re behind the wheel. Unfortunately, a lot of us wind up paying far more than we need to for this protection. Today, let’s go over the basics of getting the best rates for your auto insurance.
There is a bit more at play than just finding a “cheap” company.
How to Get the Best Rates for Auto Insurance
In most instances, you’ll have to demonstrate that you’re not a high-risk driver. The higher the risk to the insurance company, the more you’ll pay.
Keep a Clean Driving Record
Perhaps one of the most vital methods of lowering your insurance rates is by keeping a clean record behind the wheel. This goes along with most “Good Driver” discounts as it demonstrates how low of a risk you are while driving.
Group Discounts with Work or Organizations
Some organizations and places of employment offer group discounts. This is when an insurance plan is offered to members and is usually considerably cheaper than getting one of your own. The catch is that sometimes these will have “enrollment periods” of maybe once or twice per year.
Increase the Deductible of the Auto Insurance
In some cases, you’re able to increase the deductible of your insurance policy. This means you’ll need more money upfront in the event of repairs and such. The trade-off is a lower annual premium as you’re taking on more of the financial responsibility yourself.
Work on Your Credit Rating
Like most other things in life, your credit rating can affect your auto insurance premiums. The better your score, the more likely you’ll have to pay less. This is one of those things that can take some time to improve. However, the end results are often worth the effort.
Anti-Theft Device Discounts
Many insurers will have discounts available if your vehicle has anti-theft devices installed. Alarms, cut-off switches, and other technologies prevent people from stealing your vehicle. This means the auto is at a lower risk of being stolen, which then reduces the risk to insurance companies for claims.
Don’t Pay for What You Don’t Use
If you don’t use a specific service, don’t add it to your insurance policy. For example, there are a lot of people who pay for roadside assistance but have never used it. Talk with your agent and find out what you can remove that you know you’ll never really use.
Shop Around for Auto Insurance Rates
Another one of the most common methods of getting the best auto insurance rates is by shopping around. However, don’t assume cheap equates to being better. Sometimes the lower price tag comes with a vastly reduced capacity of financially protecting you.
Consider Pay-per-Mile Insurance
Some insurance companies will offer a pay-per-mile plan. This is when you need insurance but don’t really drive all that much. It goes along the lines of a “Low Mileage” policy. These are usually the most ideal for students and people who drive less than a few miles per day.
Annual Policy Updates
Lastly, don’t forget to update your auto insurance policy at least once per year. A lot of things can change in 12 months, including your credit rating and good driving record. Not to mention it gives you a chance to customize the policy further depending on your foreseeable needs.
Auto Insurance is a Necessity
A lot can happen when you’re in control of more than a ton’s worth of steel. It takes a fraction of a second for an accident to occur whether you’re paying attention or not. Having the best auto insurance for your needs will protect you from breaking the bank in most cases.
At Vargas & Vargas Insurance, we understand just how imperative insurance is, especially in today’s world. Contact us today to find out how we can help you find the best rates possible for your situation. We’ll use our network of companies to help secure something affordable that will keep you safe.
Many experts agree that owning property is a great investment, as the need for housing will always exist. Owning and managing a rental property can be very profitable, but what are the pros and cons of this venture?
Making a house feel like a home is made up of many things, from our belongings, pets, and family. Therefore, having the right insurance coverage to protect you from any unforeseen events is essential. As each home is unique, your insurance should be tailored to your needs and requirements. Otherwise, you may find that your claim for damages isn’t covered and have to pay for it yourself.
Vargas & Vargas Insurance can help you in making sure your home is fully insured. Don’t put off checking if your coverage is sufficient until it’s too late! Homeowners are sometimes shocked to discover some areas of their insurance policies are not covered. Although dealing with insurance can be tricky, we can help make it easier by providing some helpful advice about what may be overlooked or insufficiently covered in your policy.
A Comprehensive Coverage Level
When it comes to ensuring your home is secure, the insurance policies you choose should be comprehensive and detailed. Many insurance holders purchase coverage at various levels, with one being more extensive than the other. Generally, we suggest getting the highest tier available as it usually provides sufficient protection for what we need. Some agents start with a lower tier and gradually increase their coverage; however, this is not recommended when it comes to home insurance as there can be areas left unprotected or overlooked.
When protecting the things we value most, it’s not advisable to skimp on specific areas as you will discover that you get what you pay for. You need to ensure, first and foremost, that you have the right protection at an affordable cost, even if it is not the lowest price available.
Sufficient Insurance Coverage Levels
Your home insurance policy consists of six different coverages, each with its own coverage limit – the maximum sum your insurer will pay out should you file a claim. Some insurers may provide lower limits to reduce the cost of the quote they offer, however this could be inadequate for certain types of claims. In what follows, we will outline each coverage and suggest suitable limits for each.
Dwelling
Dwelling coverage safeguards the physical structure of your dwelling from destruction caused by a range of causes. With regards to dwelling, you are not permitted to decide on the coverage amounts. Instead, it is determined automatically depending on the cost of replacing your home.
Other structures
Home insurance policies also cover damage to structures not attached to the main house, such as fences, garages, pools, driveways and sheds.
Generally, the amount of coverage is set at 10 or 20 percent of the amount for the dwelling coverage; however if you have expensive other structures that are worth more than these limits allow for, you can purchase additional coverage.
Personal property
This coverage applies to any possessions you have in your house and garden. If they are destroyed or taken, the insurance will pay to repair them or get new ones.
The amount of coverage is usually equivalent to 50-70% of the dwelling protection provided by the insurance company, and this limit is pre-set.
Loss of use
If you need to leave your home due to a disaster or emergency, loss of use coverage will pay for temporary housing. Generally, the maximum amount covered is 20-40% of the dwelling coverage.
Medical payments to others
This policy provides financial protection for medical costs incurred by someone hurt while on your premises. This includes damage from falls, cuts, dog bites and other injuries.
Generally speaking, the minimum coverage limit for this part of the policy is $5,000.
Personal liability
When a person is hurt on your property and you are sued for it, this section of the policy can help pay for medical bills, legal costs or settlements.
It is essential to choose a coverage limit that is high enough – usually between $100,000 and $1 million – as lawsuits today can be expensive. In some cases, they may even exceed that amount, which is why we advise people to get umbrella insurance too.
Additional insurance options
This optional coverage can be a useful addition to your policy; it is not included in the main categories listed above. Personal injury coverage safeguards you from potential libel, slander, or defamation lawsuits.
Sewer and Water Backup Endorsement
This coverage, which is an additional expense, covers any overflow due to backup in the plumbing system, such as pipe backups, drain blockages, sewer line clogs or sump pump overflows. This is distinct from the standard overflow protection, which guards against backups in toilets, sinks and drains.
Service line coverage
This coverage, available for an additional fee, covers any repairs that need to be made to pipes or wires coming into your premises. These may include electrical lines, water pipes, or septic lines. The typical limit for this type of coverage is usually between $10,000 for services and $50,000 – 100,000 for equipment repair.
Equipment breakdown coverage
This coverage compensates for any damage to your home appliances (air conditioning, furnaces, etc.) caused by power surges, electrical shorts, mechanical failures, motor burnout or operator mistakes.
Scheduled Items
Scheduling items is a great way to guarantee your valuables are protected. By paying a few extra dollars, jewelry, art and other precious objects will be insured if they are damaged or stolen.
One of the benefits of this policy is that if you make a claim there is no deductible and mysterious disappearance (losing an engagement ring down the drain) would be covered too. T
o avoid having to pay out-of-pocket for losses, we recommend speaking with your insurance agent to ensure these important coverages are included in your policy.
New Additions and Alterations Yo Your Home
Making improvements to your home can be enjoyable, but it is important to evaluate your insurance policies to guarantee that any new changes are adequately insured.
Adding value to your property through renovations or new additions requires special attention when reviewing your home insurance policy. Not only does a stunning kitchen renovation affect the look of the house, but also any expansion of the square footage should be noted as well. If you are increasing the size of your house, then you need to modify the limits for dwelling coverage. Likewise, if you are making significant changes in outdoor areas such as a swimming pool or patio area, then other structures limits need to be adjusted accordingly.
Examining any considerable alterations to your home can be a beneficial technique to review and adjust your existing insurance policies, or search for another provider if you don’t feel satisfied with the amount of service from your present insurance company.
Working Remotely Or Running A Business From Your Home
It is easy to think that working from home would be included in a typical home insurance policy, given the increase of people who do this. However, this is not necessarily true. If you are just doing paperwork at home in your pajamas, there is no need for extra coverage. However, if you are starting a business from your house such as selling jewelry or running a photography studio, it may be necessary to take another look at your policy since some risks associated with those kinds of businesses may not be covered by the standard plan.
When talking to your insurance agent about any business activities conducted in your home, they will confirm if it is a “permitted incidental occupancy”. This would qualify you for restricted liability and property coverages. In the event that your business venture isn’t covered by this exception, you will need to get a complete commercial insurance policy to ensure proper protection.
Starting a home business can be an economical way of entering many industries from the comfort of your own home, but it is essential to take all the necessary precautions to ensure that the business succeeds.
Local Independent Insurance Broker
It can be difficult to know how to best insure our homes, but these tips should help point you in the right direction for obtaining the most suitable coverage. If you still have queries regarding your policy or would like further information, Vargas & Vargas Insurance will be happy to answer your questions; contact us at 617-298-0655.
The agents at Vargas & Vargas Insurance serving the Dorchester, MA area are happy to explain the importance of having a renters insurance policy.
Many people who rent their home, apartment, or other types of home are under the impression that their landlord’s property insurance policy will cover their personal belongings, but that is not the case. While most landlords in Massachusetts are required to have property insurance on the properties they own, it does not cover the belongings of the tenants living in these places. This is why a renters insurance policy is so fundamental for all tenants to have in place.
What Does Renter’s Insurance Cover?
Renters insurance will cover all of your personal belongings, such as your clothing and toiletries, furniture, appliances, and anything else you have purchased for your home. This means that if your house catches on fire, you will not lose everything you own because your renter’s insurance policy will assist you in replacing the items you lost and then getting back on your feet. A renters insurance policy can also assist you if a natural disaster occurs and destroys or damages the home you are renting or if the place is vandalized. A renters insurance policy can also assist you in paying for items that are stolen in a burglary.
Contact Vargas & Vargas Insurance
To obtain an adequate amount of renters insurance for your situation, you will need to create a policy. Call the experienced and knowledgeable renters insurance agents at Vargas & Vargas Insurance serving the Dorchester, MA area today to obtain a quote and to get your renter’s insurance policy started!
Service line breaks can be costly and unexpected, as they are not usually visible to homeowners. These lines provide water, gas, electricity, and other essential services to homes. At Vargas & Vargas Insurance we’ve seen how damaging a service line break can be when homeowners must pay for repairs out of pocket due to a lack of coverage on their homeowner’s insurance policy. Homeowners should only have to worry about having to dig up their garden for access if there is a punctured pipe – not the full cost of repairs too.
In this article, we’ll explore the optional endorsement you can add to your policy that provides protection for your home from any service line damages, as well as what is and isn’t covered in the policy.
Does Home Insurance Cover Service Lines?
Service lines are an important aspect of a home, but they are not usually included in a typical homeowners insurance plan. However, it is possible to include coverage for service lines by purchasing an extra endorsement from most insurers. This type of coverage provides protection from any unexpected expenses caused by damaged service lines on the property, such as tree roots blocking water pipes or cracked sewer lines. It would cover the costs for fixing or replacing these utility lines, including the expensive digging required to access them and any landscaping that may be disturbed during repairs.
Once your deductible has been paid, your insurance provider will cover the costs of repairs or replacements. Service line breaks can cost anywhere from $5,000 to $10,000, so it is beneficial to add this endorsement to your policy in order to avoid incurring these large expenses out of pocket.
Damages That Are Covered
Service line coverage endorsement typically covers damages such as:
Wear and tear
Rust, decay, deterioration, and corrosion.
Additionally, it may cover damage from tree or root obstruction or
Vermin, insects, or rodents.
Landscaping or excavation accidents,
Freezing,
Collapse, and
Mechanical or
Electrical breakdown may also be covered.
Weight from cars can cause the collapse of an above-ground structure.
The Types Of Services Provided Include:
Examples of the various services that are part of a house can be seen here.
Telephone cable lines
Water Pipes
Drains,
Natural gas
Sewage
Fuel
Sprinkler systems
Liquid flow lines
Steam
Fiber optics
Buried electric wires
Types Of Service Lines Not Covered
These service lines are not included in the service line coverage.
Fuel containers
Cabling or pipes that traverse a body of liquid
Sewage systems
Wiring or tubing that isn’t linked up and ready to go
What Does Service Line Coverage Cost
The cost of this coverage is actually very affordable and provides important protection. This coverage would usually cost between $50 and $100 per year for the $10,000 to $20,000 of additional coverage it offers on top of your homeowner’s insurance policy.
Overall cost and premium would vary depending on the insurance carrier. Because this coverage is so affordable and offers important protections, Vargas & Vargas Insurance tends to recommend this coverage for all of our client’s policies.
Protecting your home from service line breaks
Staying on top of the upkeep and inspections of your home can be tricky, so it’s a good idea to ensure you’re protected from any possible damage by having comprehensive coverage in your homeowner’s insurance policy. As a homeowner, it is essential to understand what is included in your insurance policy and the areas where you may not be covered.
Your Local Independent Insurance Broker
Vargas & Vargas Insurance is dedicated to providing customers with the best service possible. We are independent brokers and work with many financially strong insurance companies to customize an insurance plan that meets the individual needs of our clients. For four decades, we have been helping homeowners understand the significance of having the proper homeowners insurance.
When buying a new house, getting help from a trustworthy insurance agent and an experienced mortgage broker is essential. Even if you have bought thirty homes before, you may not realize that homeowner’s insurance can complicate the mortgage approval process in Boston, MA.
Mortgage Company Requirement
When obtaining a loan from a bank or other lender, you will be expected to provide proof of an insurance policy sufficient to either rebuild the home or cover the mortgage amount. Your chosen mortgage broker or loan officer has to meet the lender’s standards, but it is also important for your home insurance policy to cover what it would cost to reconstruct your house in case of a claimable event and not just the value of the mortgage.
Replacement Cost Versus Mortgage Amount
It is likely that the amount to reconstruct your home will be different from the mortgage amount you take out. You certainly don’t want to miss the difference in case of a disaster such as a fire. For example, if you borrowed $250,000 after making a down payment of $50,000, that means the house is worth $300,000. But reconstructing it (including labor and materials) could cost up to $375,000. It is important to remember that there is a variation between buying and rebuilding your house.
An appropriate homeowners insurance policy would cover up to $375,000, not the amount of your mortgage.
The Mortgage Company Binder Requirement
Your mortgage broker needs to see an insurance binder with the bank’s name and the proper language. Failing to provide this correctly could lead to a postponement of the closing date. To ensure that you are prepared, a reliable Boston MA, mortgage broker will supply the exact language the bank requires and thoroughly analyze the binder prior to the closing. This way, they can make sure that the binder contains all of the necessary information and meets all of the guidelines set out by the bank. They can also help ensure that the binder is properly formatted and all of the necessary details and terms are included. This can help avoid any potential issues or delays on the closing day. By taking these steps, you can be sure that you are well-prepared for the closing and that everything will proceed smoothly
When is a great time to shop around for your insurance binder
We recommend calling local independent insurance brokers around the time that your offer is accepted and you have scheduled the home inspection process. This will give your insurance broker enough time to shop around for the best coverage at the best price for you and your new home.
Insurance Discounts
At Vargas & Vargas Insurance, we recommend that homeowners bundle their house and car insurance to get all the possible discounts. We work closely with the top mortgage brokers to ensure they have the necessary paperwork done on time; having an insurance binder is a key part of getting a home loan approved. We are experienced in dealing with all mortgage brokers in Massachusetts.
Local Independent Insurance Agency
Vargas & Vargas Insurance is a local independent insurance broker, we work for you, the customer, and not any one insurance company, and we always have time for you. We shop around with many local and national insurance companies to offer you a tailored fit insurance policy for your specific needs. We have been helping first-time home buyers for over 40 years and teaching them about the significance of their homeowner’s insurance, call us today.
Experiencing a car crash in an unfamiliar place can be frightening. Not only must you cope with the emotional and physical effects of the accident, but you’re in unfamiliar surroundings. You may have many queries at once, but the first one is likely to be “Do I still have insurance coverage when I’m not home?”. Let’s look into this matter further.
Where Does My Policy Cover?
You don’t have to be concerned if your auto insurance doesn’t seem to apply in other states; most policies cover all 50 states, and the U.S. territories such as Puerto Rico, and even the Canadian provinces. To make sure you understand exactly what your policy covers before traveling with your vehicle to another state or country, you should speak with an insured attorney. Note that going into Mexico or other South American countries may not be included in your insurance coverage.
What is included in my insurance coverage?
If you are involved in an accident out of state, your car insurance will adjust to meet the requirements of the state where the accident occurred. For example, if you are from Massachusetts, your car insurance will have minimum liability limits of 20/40/20 for property damage and personal injury protection (PIP). If you are involved in an accident in Georgia, their state requires minimum liability limits of 25/50/25 for bodily injury and property damage liability.
If you are in an accident in Georgia, your insurance policy’s limit for liability will automatically increase to the state’s minimum.
If you’re driving in a state with a lower liability limit than your home state, your insurance policy will provide the maximum coverage on your policy, even if it’s more than what the state you’re visiting requires.
What if the state does not have a “no-fault” policy?
In states that have a no-fault system, drivers must carry at least $10,000 in personal injury protection (PIP) coverage. This means that if an accident happens in one of these states, the PIP coverage will be used to cover any injuries regardless of who was at fault. In contrast, tort states do not use a no-fault system and the negligent driver is held responsible for any injuries resulting from an accident.
If you suffer an injury caused by a careless driver while travelling in the state of Georgia, which is a “fault” state, the driver would be held accountable for your injury and related costs. The law of Georgia will decide how to settle the incident and the insurance policy held by the responsible driver will determine how medical expenses and lost wages are dealt with.
In a no-fault state, the minimum PIP coverage required by law is the same for both Georgia residents and Massachusetts drivers. The governing law in a no-fault state will be based on the state in which the accident occurred.
What is the best way to deal with a car accident occurring in another state?
Always follow the standard auto accident checklist when involved in a crash, which includes checking for injuries and the safety of passengers, calling the police and emergency services, assessing and documenting damage, and contacting your insurance company.
Depending on your insurance policy, your insurance may also cover additional expenses such as towing or repair costs.
When speaking with your insurance company, be sure to let them know that you are in a different state so they can determine what coverage is available to you..
Auto accidents can be confusing, so make sure to discuss your accident with your local independent insurance agent
Local Independent Insurance Agency
Vargas & Vargas Insurance is a local independent insurance broker, we work for you, the customer, and not any one insurance company, and we always have time for you. We shop around with many local and national insurance companies to offer you a tailored fit insurance policy for your specific needs. We have been helping first-time home buyers for over 40 years and teaching them about the significance of their homeowner’s insurance, call us today.
In Massachusetts, all drivers are required to register their vehicles and purchase compulsory auto insurance coverage. To ensure that drivers comply with state insurance laws, drivers must turn in their license plates before canceling their auto insurance policy. And if you are transferring your Vehicle’s ownership, it is your responsibility to properly register and insure the car before driving on state roads. Leaving your license plate on the car could make you liable for the actions of another driver.
Before You Turn In The Plates, Are You Planning To Buy A New Vehicle?
If the answer is yes, then you have seven days from the sale of your old car to register a similar one with the same license plates.
In Massachusetts, you have seven days after disposing of a car to transfer the plates to the new vehicle. You must be at least 18 years old, the new vehicle must be of the same type and have the same number of wheels, and you must carry the transfer documents to prove the registration transfer.
To use the 7-day grace period, you must transfer the title of your old car to a new buyer.
It the answer is no, then cancel the plates immediately. This is because your Auto Insurance follows your registration, not the vehicle itself. If you don’t cancel the plates, you will still be liable for any excise tax associated with that vehicle and cannot cancel insurance coverage either.
How Do I Cancel My License Plates
In order to terminate your vehicle’s insurance coverage, you will need to submit a Plate Return Receipt. Here is the link for the state of Massachusetts:
To cancel your plate, you need your email address, the type and number of the plate, the last four digits of your Social Security Number, and a Driver’s License. Once you have finished cancelling your MA plates, please inform our office and send us a copy of the Plate Return Receipt for proof that coverage for the vehicle has been cancelled. As a courtesy to our customers, we offer various RMV services such as Registration and Title Applications, plate transfers, registration renewals etc.
If You Are Junking Your Car
If you have been in an accident, your car might be totaled and not worth selling. Sometimes, old cars simply have little value or have major mechanical problems like a blown motor or damaged transmission. In such a case, you might choose to donate your car to a non profit, Click here to learn more about donating your car, or have your car towed to a junkyard where it will be crushed. Your license plate still has the same function – it identifies you as the owner of the car. As soon as your car is out of your possession, you have no control over what happens with the license plate. Remove the license plate when you take your personal possessions out of the car. This is a good idea to be safe, especially if you are thinking of selling the car
If You Are Returning A Leased Vehicle
When returning a leased car to the dealership, you are still responsible for all of the belongings that came with the vehicle. This includes the license plate. Before returning your leased car, make sure you have everything that came with it, including the second set of keys, cargo covers, spare tires, original floor mats, and third row seats. Remove all your possessions from the car and take off the license plates.
Vargas & Vargas Insurance is always available to help you, with your Massachusetts auto insurance policy, you can contact our team at 617-298-0655 when transferring ownership of a vehicle, turning is a leased vehicle, or donating your car. We can help you understand your auto insurance policy in Massachusetts.
When you take out a mortgage from a bank or lender, they will also set up an escrow account for you. This account is used to pay your property taxes and homeowner’s insurance premiums on time, every year. Even though these costs are annual, your lender will require you to pay a monthly amount towards each cost. This way, the balance accumulates in your escrow account and ensures that these expenses get paid on time. Some, mortgage lenders require borrower escrow accounts because it minimizes the risk of falling short of financial obligations as a homeowner. In a foreclosure, unpaid taxes or insurance can result in liens against the property. This makes it harder for the mortgage lender to recover the original loan.
Lenders have a strong incentive to keep borrowers on track with escrow accounts that smooth out the non-mortgage costs of owning a home. By doing so, they can avoid costly penalties and interest charges.
Should you use an escrow account?
An escrow account is often required when obtaining a conventional mortgage, with a down payment of less than 20%. With an FHA or VA loan, this requirement may not be in place. There are reasons to have an escrow account, such as making payments and covering potential shortfalls.
Assuming you have an option, setting up an escrow account can be a convenient way to pay for mortgage, home and mortgage insurance, and property taxes. The funds collected in the account can provide a buffer if there are any unexpected increases in premiums or taxes.
Escrow Drawbacks
Escrow accounts tie up your funds, but you can earn interest on them. -You may be required to deposit several months of property taxes when you open the account, depending on the time of year.
If Your Mortgage Doesn’t Include An Escrow Account
You will need to be prepared to cover these substantial costs yourself.
Be certain you factor in these additional expenses and remain up to date on your tax and insurance payments. If you neglect to pay your property taxes, the state or local government could enforce fines and penalties or put a tax lien on your house. You could also be faced with foreclosure. Furthermore, if you don’t pay your taxes or insurance, your lender may: 1. Add the amounts to the balance of your loan 2. Include an escrow account in your loan 3. Force place insurance that only covers the mortgage company for the loan amount that you owe them and for you and bill you for it. And this type of insurance bought by the lender, is usually more costly than homeowners insurance that you cover yourself.
At Vargas & Vargas Insurance, we always have time for you. You can reach our team at 617-298-0655 or by clicking here to reach out to us.
For motorcycle owners in Dorchester, MA, the off-season can be a great time to keep your ride in top condition. With proper care and maintenance, you can ensure that your motorcycle runs smoothly when the spring arrives.
Cleaning and Waxing
Before putting your motorcycle into storage, you must give it a thorough cleaning and waxing. Use a mild detergent and soft cloth to clean your bike, then apply a wax coating to protect against the elements. This will help to protect your bike’s paint job from any dust or dirt that may accumulate while it’s in storage. It will also help prevent rust or corrosion from taking hold when exposed to moisture.
Lubrication Maintenance
Another critical step is lubricating your bike’s moving parts before storing it away for winter. This includes everything from chains and cables to brakes and bearings, so pay special attention to these areas during the lubrication process. You should also check all nuts and bolts to ensure they are tight, as loose parts can cause significant damage down the road if not taken care of now.
Insurance Coverage Review
Finally, reviewing your insurance coverage when preparing for the off-season months is always a good idea. Ensure that you have adequate coverage for any potential losses or damages that could occur while your bike is in storage. If you’re looking for a reliable motorcycle insurance policy, look no further than Vargas & Vargas Insurance. We offer competitive rates throughout Dorchester, MA, and beyond—so don’t hesitate to contact us today if we can assist you with finding the proper coverage.
To learn more about our insurance policies or get started with a free quote, don’t hesitate to contact Vargas & Vargas Insurance today! We look forward to helping you get ready for the off-season!
In the property and casualty insurance industry, prices, coverage availability, and capacity can be affected by changes between soft and hard markets. Up until now, the insurance industry has been in a soft market for nearly 15 years but is now shifting to a hard market.
In a soft market, there is fierce competition with premiums that are stable or decreasing. To sustain or get more business share, many insurance companies are liberalizing their underwriting rules and lowering what they charge. This makes it possible for insurance brokers to obtain better coverage and better insurance premiums for their clients. A wider range of coverage is accessible, with some additional riders included at little or no extra cost.
The Causes Of A Soft Insurance Market May Include
An active, prosperous economy,
A positive interest rate environment,
Low/favorable claims activity,
A plentiful supply of capital,
And substantial policyholder premium surplus.
The Causes Of A Hard Market Could Be Attributed To
In comparison, a hard insurance market is when premiums are increasing, insurers are not willing to negotiate terms and underwriting standards become stricter. Insurers also pay close attention to rates and manage coverage availability in response to certain factors that shape the insurance market cycle.
And global affairs (e.g., pandemic, climate change, etc.).
For instance, large losses from global natural disasters like hurricanes, earthquakes, and wildfires can generate immense property insurance claims. Additionally, other occurrences can also lead to increased claim frequencies impacting other areas of business., such as Covid-19, sizable litigation remunerations, or a greater number of distracted driving cases.
How does Reinsurance work
You may be wondering about reinsurance. Reinsurance is a form of insurance that all insurance companies take out to protect themselves from large financial risks.
For example, if your home is insured for $500,000, your insurance company may only insure a percentage of this amount; they then purchase reinsurance to cover the rest of your coverage. This will make sure that if there ever is a major loss event, the insurer has enough resources to meet their obligations.
How Economic Conditions Affect Your Insurance
Economic conditions have the potential to influence an insurance company’s capacity to issue new policies. During a recession, businesses may buy less insurance or have lower risks. Revenue might decline, and layoffs occur, which would lead to lower premiums for the carrier. Furthermore, this situation usually results in low-interest rates, which reduce insurers’ investment profits.
When the insurance market starts to harden, it’s imperative to be working with an independent insurance broker with extensive knowledge of the marketplace and strong relationships with multiple insurance companies, and who reviews your insurance policy not just when you first purchase the policy but at renewal time to ensure you have the ideal protection for your requirements at the most competitive rate.
At Vargas & Vargas Insurance, we are always available to you. If you choose us as your provider, we will work hard to make sure you have the most suitable coverage at the most competitive rate. Please contact our office at 617-298-0655 so that we can examine your insurance needs and guarantee that you are fully protected.
Life insurance is one of those things that you should never go without. Should you cease to exist, your family will face an incredible financial burden on top of losing your regular income. If you truly love your family, make sure you have a good life insurance policy.
How Life Insurance Relates to Love
When you love someone, you don’t want to see anything happen to them. You’re constantly striving to be in their corner while doing what you can to make their lives easier to manage.
But what happens should something happen to you? How will your loved ones fare financially should the unexpected occur? With the world’s state today, it’s a considerable risk just walking into a grocery store.
Ensuring Sustainable Family Lifestyles
How much of your family’s lifestyle requires your income? I’m not talking about designer clothes or expensive toys every week. A lifestyle could include everything from the types of food your family eats to paying for intramural or city-league sports.
Perhaps you cover everyone’s expenses for going to the gym every month.
Covering Death Expenses
When you die, there is a slew of expenses that follow. For instance, a casket, embalmment, burial plot, headstone, funeral services, and much more tally up very quickly. Even if you plan to be cremated, there is a cost there as well.
Life insurance helps cover those expenses so the ones you love don’t have to worry.
Personal Care for Those You Love
Child care can cost an overwhelming amount of money, especially for someone who lost a second stream of income due to your death. Or, maybe you help cover expenses for dependent caregivers for your elderly family members.
Who is going to take care of those expenses if you’re in a fatal car accident?
College and Education
College tuition and basic education are extremely expensive in the United States. While some students qualify for loans and grants, a lot of them do not.
If you’re paying for your child’s education, are they able to finish school without your income?
Debts that You Co-Sign
There are a lot of reasons why you might co-sign for a loan, property, or other purchase for someone. In fact, it’s quite common to co-sign the financing for an automobile for a child.
If your life comes to an end because of a hurricane, does your insurance help those you love handle those debts?
How Much Does Life Insurance Cost
The cost of life insurance depends on many factors, such as age, health profile, and lifestyle. A 40-year-old in good health can purchase $500,000 of a 10-year term policy for around $20 per month. And the same 40-year-old can purchase 500,000 life insurance policies for around $30 per month. It is important to review your life insurance policy regularly to make sure that it still covers your family’s needs and obligations.
Love Your Family Enough to Be Covered
Sure, a lot of what I pointed out above are hypotheticals. Still, never underestimate the fragility of human life. All it takes is someone not paying attention on the road, a natural disaster, or an act of evil in a public space to end yours.
While some may think it’s unsettling to plan for their demise, it’s better than trying to wing-it should something happen to you. You want the ones you love to be financially protected through your life insurance policy. Otherwise, they could be on the hook for an incredible amount of debt.
At Vargas & Vargas Insurance, we can help you find the best life insurance policies for your specific needs and wants. Contact us today and find out how we can help you protect the ones you love in the event something happens to you.
The last thing you want is for your death to result in ruining your family’s ability to remain sustainable.
One way to save money in premiums is by bundling insurance policies together. This is when you use the same provider for all of your insurance needs. It’s kind of like getting a “buy in bulk” discount.
Most providers will offer discounts for bundling policies because it helps them make more money. Essentially, you’re giving insurance providers more business, and to show appreciation, many will have significant discounts.
However, there are times when bundling might not be the best option. This, of course, depends on your provider. In rare instances, bundling could actually cost you more in the long run.
This can depend on a lot of factors, and as I said, it’s not very common.
Why Consider Bundling Your Insurance?
Perhaps the most obvious benefit of bundling insurance is the cost savings. When combing things like home and auto insurance through a single provider, you could save instead of paying higher premiums to two different insurers.
Another element of bundling is the convenience factor. Instead of having two online portals or two completely different agents, everything is often handled from a single point of contact.
It’s simply much easier to manage overall. Especially if one insurer already has all of your needs covered and knows the ins and outs of your situation.
How Much Can Bundling Insurance Save You?
Every insurer is different. How much you save depends on your provider and how they calculate your rates. However, many of the most popular providers will offer anything from 6-23% by bundling insurance policies.
On average, you could possibly save around 14% of your premiums every year. Again, though, this depends greatly on the insurance company.
In any case, it’s worth finding out how much your insurer will discount by bundling. After all, there’s nothing wrong with asking, right?
Can You Bundle Policies Later?
Most insurers will allow you to bundle policies as time marches on. This means that if you buy homeowner’s insurance and then two years later decide to add automobile coverage, you still have access to discounts.
Remember what I said earlier; it’s all about giving the insurer more business.
There might be some who don’t offer the best discounts if any at all. In that case, I suggest calling around to see if you can find a better alternative.
What Happens if You Cancel One of the Policies?
Canceling one of your policies may wind up costing you more money. Obviously, without a “bundle” of different services, you’ll revert back to the normal annual premium.
Then again, this also depends on how many accounts you’ve bundled together. Some companies will bundle home, auto, and life insurance. If you cancel, say, the auto insurance, you might still get the discount since you have home and life insurance policies remaining.
You should contact your provider to find out more information about what you can bundle together.
Why It’s Important To Work With A Local Independent Insurance Broker
While it may be tempting to go with the big national insurance companies, working with a local independent insurance broker can save you money on your insurance. Here’s why:
1. As a local independent broker, we have access to a variety of insurance companies, so we can shop around and get you the best possible insurance rates.
2. Local independent broker, we know the ins and outs of the insurance market in our area, so we can help you find discounts and savings that you might not be aware of.
3. Bundling your insurance policies with a local independent brokercan often save you money. That’s because many insurers offer discounts for bundling multiple policies with the same insurance agency.
4. Working with a local independent broker gives you someone to talk to face-to-face about your coverage needs and concerns. You’re not just a number to us, so we’ll take the time to really understand your situation and find the best coverage for you.
Bundling Insurance Policies Can Save You Money
How much can you save by bundling policies? At Vargas & Vargas Insurance, we’ll help you answer that question by using our network of providers to find the best deals for you. Contact us today to see how much we can help you save by bundling your policies together.
It’s convenient, and it could result in saving quite a bit on your premiums.
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.
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.
A personal umbrella policy provides additional liability protection beyond the liability limits that you now carry on your home, renters, or condo insurance and auto insurance. If you are sued and exhaust your existing liability coverage, the umbrella policy will take care of the remainder up to the limit you selected.
Furthermore, it covers legal costs while defending or settling a lawsuit. In certain situations it may even provide coverage not available in your original policies.
Carrying umbrella insurance makes you less stressed about the future.
Worrying about how a lawsuit down the road could destroy you financially is stressful. Purchasing umbrella insurance is the ideal way to avoid such stress.
Umbrella insurance provides a safety net and protects your finances from the uncertainties you face in the coming years.
Umbrella insurance allows you to participate in activities you love without the risk.
Umbrella insurance is particularly recommended for those who participate in certain activities. For example, umbrella insurance coverage is recommended for consumers who use recreational vehicles or coach children’s sporting activities.
Umbrella coverage is also recommended for those who serve on an organization’s board or participate in activities such as hunting.
With umbrella insurance, you can enjoy activities like these that may leave you open to financial risk without adequate coverage.
Umbrella insurance protects your hard-earned money.
It’s typically recommended that consumers carry enough umbrella insurance to cover the full value of their net worth. That’s because umbrella insurance protects all of the hard-earned money a consumer has saved up throughout their life.
Umbrella insurance protects the funds and assets you have worked hard to accumulate throughout your life.
What does it cost?
The good news is probably not as much as you think. Costs of personal liability umbrella policies range based on various factors such as how many properties you have, how many autos you have, your driver history, and your experience as a driver.
A $1 million policy may cost between $160 and $300 per year. As you increase policy limits beyond $1 million, the premium cost increases in smaller increments. For example, a $2 million policy might only cost 1.8 times the cost of the million dollars one, a $3 million dollar policy might cost 2.55 times the million dollar policy, and a $10 million dollar policy might cost 8.9 times the million dollar policy.
Your Local Independent Insurance Broker
At Vargas & Vargas Insurance we always have time for you, you can reach our team at 617-298-0655, we can help make sure that your financial future is properly insured. Give us a call to get a quote on an umbrella insurance policy!
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.
Auto insurance can play a critical role during the winter months. From frozen and slippery roads to white-outs during a snowstorm, you want to have coverage in the event something happens.
However, insurance can only go so far. Your policy isn’t going to cover wear and tear or issues that happen from poor maintenance. While there are several ways you can winterize your car before it snows, what about during the middle of winter?
Let’s take a look at seven ways to help protect your car in the winter aside from proper insurance coverage.
1. Maintain the Battery During Winter Months
The colder months put quite a strain on vehicle batteries. First of all, low temperatures lead to less of an electrochemical reaction within the unit. This means the battery will perform worse during the winter.
It’s vital that you test your battery regularly and replace it before you find yourself stranded somewhere.
2. Keep Timely with Oil and Fluid Changes
Low temperatures cause liquids of all kinds to move slower. This means that any fluids that are dirty, contaminated, or at low levels will hurt the performance of your vehicle more so when it’s freezing outside.
Driving around in the winter while you’re several thousand miles past an oil change increases the strain on the motor.
3. Watch the Radiator and Hoses
Antifreeze is a crucial element for many cars on the road today. And if you’re levels are low or contain more water than actual antifreeze, your radiator and hoses can freeze up.
Frozen lines can lead to splitting, which then results in the engine overheating.
4. Make Sure Belts Are Not Worn
The last thing you want to experience is a belt snapping while driving on the freeway during a snowstorm. Never underestimate how much wear and tear your belts go through on any given day.
Be aware of any kind of fraying or worn-out sections of the belts that keep the motor turning. Just make sure your car isn’t running before you check them.
5. Keep an Eye on the Tire Tread in Winter
Snow, slush, and mud are common road hazards during winter months. You want to make sure your tire tread is apt to take on what nature throws your way.
This is one of the biggest reasons why many people have a separate set of snow tires available for the winter months.
6. Check Your Bulbs and Replace if Needed
Bulbs for your car are usually not that expensive. And depending on the make and model of your vehicle, they are very easy to replace. Make sure your headlights and brake lights are visible to everyone during a storm.
Also, pay close attention to any condensation within the bulb housing. If the bulbs are getting wet, you’ll need to find the leak and seal it before your new bulbs blow out.
7. Use a Car Cover
Car covers, while a bit inconvenient to put on and off in the winter, can save you a lot of trouble. They protect the car from a plethora of weather types. Not to mention some may even alleviate frost buildup on the windshield.
You can find a lot of car covers for less than $100, and they’ll probably save you more than that throughout the year in maintenance expenses. Especially if you spend a lot of money keeping the vehicle clean.
Car covers are a great option if you don’t have a garage.
Winter Months Can Wreak Havoc on Autos
Depending on where you live, the winter months are some of the most strenuous for an automobile. And if you break down on the side of a snowy freeway, it’ll be incredibly strenuous for you.
In the event something does happen, though, you want to make sure you’re properly covered. At Vargas & Vargas Insurance, we’ll help you find the best policies for your auto regardless of the weather. Contact us today to see how we can help you save money while keeping your auto covered during the coldest months of the year.
If you are purchasing (or have purchased) a home in a flood zone, you need to purchase a flood insurance policy. And if your mortgage was an FHA, VA, or USDA loan, and your property is in a flood zone, in the past, you could not purchase your flood insurance from a private flood insurance company. . However, recent changes made to HUD may save you a great deal and may help you qualify for a larger mortgage.
Flood Insurance and FHA-VA and USDA Mortgages
Most standard home insurance policies will provide coverage that will help you with flooding caused by something like a burst pipe, a furnace, or hot water heater that bursts, and the water causes damage to your home. However, this does not include the damages caused by Mother Nature herself.
For example, damages caused by heavy rains, rising rivers, the melting of snow or hurricanes, or other types of flooding caused by a natural disaster aren’t often covered. At least in a standard policy.
Recent conditions from HUD INCREASES FLOOD INSURANCE OPTIONS FOR HOMEOWNERS WITH FHA MORTGAGES LIVING IN SPECIAL FLOOD AREAS.
The upside is that HUD is expanding flood insurance choices for individuals and families with FHA-insured loans. In the past, the National Flood Insurance Program was the only option for FHA-insured mortgages. As of December 21, 2022, however, private insurers are now available as an option.
This is to help keep people protected from high costs while addressing damages caused by climate change.
New Homes and Special Flood Hazard Areas Insurance
According to HUD 4000.1, if any portion of a home is in an SFHA (Special Flood Hazard Area), the home is not eligible for FHA mortgage insurance. This includes proposed or new constructs.
However, there are a few exceptions, such as the lender acquiring a FEMA Letter of Map Amendment or a Letter of Map Revision showing the property is removed from said area.
Another exception is if the lender acquires a FEMA National Flood Insurance Program Elevation Certificate. This is FEMA Form 81-31 and must be prepared by a licensed surveyor or engineer.
What About Existing Structures?
New homes are not the only properties to adhere to flood insurance requirements. Though, the terms for existing properties within an SFHA are often shorter than when building a completely new home.
A property does not qualify for the FHA-insured mortgage if:
it is in a Special Flood Zone Area
it is located in a coastal area and the National Flood Insurance Program is unavailable.
the home is located in SFHA Zone A.
it is located in Zone V.
You must maintain flood insurance coverage for the amount remaining on the mortgage or the replacement cost of the home. Whichever is lower is often the amount of the coverage.
Don’t Let Flood Insurance Soak Your Wallet
Flood insurance can be very costly, especially if you’re buying a home in a high-risk zone with an FHA loan. Luckily, private flood insurance may help you get a policy that is less expensive or provide enhanced coverage and allow you to qualify for a larger mortgage.
Thanks to the changes at HUD, you have more options available when choosing a provider.
At Vargas & Vargas Insurance, we may be able to help you save money while being in a Special Flood Hazard Area. Contact us today to see how we can help. We have access to private flood insurance markets that could save you a bundle.
