How Personal Property Insurance Protects Your Property

Posted on June 15, 2021May 26, 2021 by cvargas

A family playing a board game in their family room with books in the background

If you are a homeowner, you probably have homeowner’s insurance. This type of insurance generally provides some coverage for your personal property. This coverage is only for the homeowner’s property — it does not cover real estate or property belonging to renters or roommates. If your personal property exceeds the value covered, or if you are a renter, you will need to purchase a personal property insurance policy. If you live in a condo, check out our blog post about condo insurance coverage.

What Does Personal Property Insurance Cover?

According to Insurance.com, most home insurance policies only offer coverage for 40-70% of the home’s insured value. What does a personal property insurance policy cover? Many of the items that you own including clothes, appliances, furniture, and home decor. If these items are damaged or stolen, the policy will reimburse policyholders the estimated cost to repair or replace the property.

But some of the property that you own may not be covered. This could include jewelry, artwork, firearms, pets, and collectibles. Insuring these high-value items will require the purchase of a scheduled endorsement. Many insurance companies will also ask for an appraisal of the items.

Making a Claim

If your property is damaged or stolen, then you will need to contact your insurance company to file a claim. The company may ask you to provide pictures as proof of the damages. Any receipts that you can provide as proof of purchase of your property should go to the company, as well.

When your insurance approves your claim, you will receive reimbursement according to the terms of your policy. The policy will either pay the actual cash value, which includes depreciation and pays out for the estimated current value of items, or replacement cost value. This provides the amount needed to replace the property and does not include depreciation.

How Do You Get Coverage?

When you need insurance coverage, you can contact a direct writer. These agents work directly for a prominent name insurance provider. You could also contact an independent agent. Independent agents can often offer better coverage prices because they will have several options for you to choose from. Also, they will be familiar with insurance needs in your area.

If you live in Massachusetts, Vargas & Vargas is here to help you find the policy that fits your needs. 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 are here to answer all of your insurance questions. Contact us today.

How Much Liability Insurance Do I Need to Buy?

Posted on June 8, 2021May 26, 2021 by cvargas

Homeowners are responsible for ensuring safety on their property. Consequently, you can be held accountable if someone is injured on your property because of unsafe hazards. This is why homeowners need liability insurance coverage.

How Does Liability Insurance Coverage Work?

Your homeowner’s insurance policy has a liability portion that provides coverage for accidents and damages associated with your property, family members, and pets. For example, a visitor may sue you for compensation if they are attacked and injured by your pet. Additionally, anyone can sue you if they slip and fall on your slippery pavement or sidewalk.

Liability coverage can protect you from the resulting financial loss. To this end, a typical liability policy will cover the following expenses:

The injured party’s medical expenses
The cost of your legal defense
Repair costs for the other party’s damaged property

Some policies cover a wider range of risks. Your policy’s coverage will depend on how much insurance you buy, as explained below.

How Much Coverage Should You Get?

Standard homeowner liability insurance policies cover up to $300,000 worth of injuries and property damages. However, this may not always be sufficient to cover all of the resulting expenses. Consequently, you may need to pay for the extra costs out-of-pocket, which can be financially crippling.

Alternatively, you can increase your insurance coverage. For example, you can extend coverage to up to $500,000 by paying higher premiums. You can also buy an umbrella liability policy that will extend coverage to $1 million and more (up to $5 million).

Final Thoughts on Liability Insurance

Vargas & Vargas Insurance is one of the premier local independent insurance agencies. We work for our clients and not the insurance company. Our team can customize your homeowner’s insurance coverage to meet your specific needs at the right price.

We are here to answer all of your insurance questions. Contact us today to learn more.

Car Insurance Terms, Part Two: Car Insurance Claims

Posted on June 1, 2021May 18, 2021 by cvargas

Understanding the basic language of your auto insurance policy is important. However, knowing your coverages and car insurance claims terminology is what really matters when your insurance suddenly becomes more than just another monthly bill. Learn more about these important terms:

Liability

Liability coverage has three distinct coverages under one heading. All of them protect the claimant in an accident. The first is the bodily injury liability per person. The amount of coverage shown is the maximum pay-out amount for injuries to any one claimant in an accident.

Next is the bodily injury liability per accident. This amount is the maximum pay-out amount for bodily injury per accident, regardless of how many people receive injuries.

Lastly, property damage liability is the maximum amount that will be paid out for damage to property (autos, buildings, etc.) per accident, regardless of how many vehicles you are held responsible for.

There is a maximum pay-out under your auto insurance. But you are still legally responsible for any remaining damages. That’s why it’s vitally important to discuss your coverage choices with your insurance agent. Maintaining state-required minimums does not release you from full responsibility to the claimant.

Medical Payments

After car insurance claims, your policy may provide coverage for medical expenses to you and/or your passengers up to the limit listed.

Personal Injury Protection (PIP)

PIP coverage provides a little more extensive coverage when you receive injuries in an auto accident. This includes elements such as lost wages and other damages, regardless of who is at fault in the accident.

Comprehensive

Sometimes referred to as “other than collision,” this is for covered damage to your vehicle that is not the result of a collision. Some examples include fire, theft, vandalism, glass breakage, and animals. Coverage is subject to your deductible.

Collision

When your vehicle collides with another object, whether it’s a vehicle, building, pothole, or something else, the damage falls under your collision coverage. It is also subject to your deductible. Comprehensive and collision coverages are required when your vehicle has a lien or leaseholder. It protects their interest in the vehicle until it is paid off.

Uninsured Motorist Coverage

Uninsured motorist coverage protects you when your vehicle is struck by a vehicle that does not have enough coverage, has no coverage at all, or commits a hit-and-run. It may include coverage for bodily injury, property damage, or both. The coverage amount limits the amount paid.

Additional Coverage Options

Insurers offer a variety of additional coverages for your convenience, including emergency road service and car rental reimbursement.

Claim

A claim is when an insured or claimant believes an insurance company should reimburse him or her for damages resulting from an event.

Claimant

An individual who makes car insurance claims against another party (or their insurance company) is a claimant.

At-Fault/No-Fault

Some states require that fault be assigned in an accident and that the responsible individual be held accountable for the entirety of the accident’s damages. But other states are no-fault. That means each vehicle owner’s insurance takes care of damages for their insured, regardless of fault. Massachusetts is a no-fault state.

Subrogation

Even in an at-fault state, it is common for the insurance of the not-at-fault party to pay for damages upfront. Then repairs can happen quickly. The insurance company will then subrogate, or pursue, the responsible party or their insurance for reimbursement of paid-out expenses.

See the first part of our series on car insurance terms for more helpful auto insurance explanations.

Vargas & Vargas Insurance understands that insurance terminology can be confusing. That’s why, as a premier local independent insurance agency, we strive to build the relationships necessary to customize your insurance coverage to your needs at the right price. Contact us today.

Car Insurance Terms, Part One: The Basics

Posted on May 25, 2021May 18, 2021 by cvargas

The average U.S. driver spends 55 minutes per day behind the wheel of an automobile. With that kind of exposure, there’s a good chance you’ll need to utilize your auto insurance coverage at some point. However, waiting until you have a claim is not the best time to learn what common car insurance terms mean. By understanding your car insurance policy now, you can avoid coverage concerns when a claim arises.

Start with these car insurance terms:

Declarations (Declarations Page)

This is the page of your policy that gives your basic identifying information. Examples of this information include the name and address of the insurance provider, to and from dates of coverage, basic coverages included in the policy, deductible amount, premium, and any lien or leaseholders. Your insurance identification cards provide the most basic information about your policy, but your declarations page goes a little more in-depth.

Insurance Identification Card

Most insurance companies provide a paper, wallet-sized proof of coverage. This card shows the very basics of your policy to provide to law enforcement in the event of a traffic stop or accident. It is also very common for an electronic version of the identification card to be provided through a mobile app for even greater convenience. After all, the paper version has to be replaced with an updated version with each policy renewal.

Insured/Insurer

The insured is the person coverage being provided for—generally, the owner of the auto. The insurer is the insurance company providing the coverage for your car.

Lienholder/Leaseholder

The lienholder is the financial institution, or individual, who holds the title to your vehicle. They hold it until you pay the lien in full. The leaseholder serves the same role for a leased vehicle. Both of these parties hold a financial interest in your vehicle, so your policy will list them.

Policy Period

This is the time period your auto is currently insured — usually semiannually, although some auto policy periods are for a year. Most auto policies renew automatically, provided you continue to pay the premium.

Premium

The semi-annual or annual amount you pay for your auto insurance is the insurance premium. This premium can usually be divided into payments that are convenient for you, such as monthly, quarterly, or semi-annual payments.

Deductible

The amount the insured is responsible for at the time of claim is called the deductible. When a claim is less than the deductible amount, the insurance will not make payment. If the claim is more than the deductible, the amount of the deductible is deducted from the total claim amount before the check is written. The deductible is never given to the insurance company by the insured.

State-Required Minimums

Most states require a certain amount of auto insurance for drivers to maintain a vehicle tag and drive public roads legally. State-required minimums refer to the basic amount of coverage required by law in your state. It is important to note that abiding by state-required minimums for your insurance coverage does not relieve you of the legal obligation to pay for damages that exceed that coverage. So discuss your individual risk with your agent. Securing appropriate coverage in excess of the state-required minimums ensures compliance with state laws and prevents out-of-pocket costs in larger claims.

Vargas & Vargas understands there is a lot more to choosing the right coverage than knowing car insurance terms. That’s why we are a premier local independent insurance agency. We work for you, not the insurance company. We are here to answer all of your questions and customize your coverage to your specific needs at the right price. Give us a call to discuss your coverage today.

Condo Insurance Coverage Terms You Need to Know, Part Two

Posted on May 18, 2021April 19, 2021 by cvargas

Having a condo insurance policy brings peace of mind — that is, until you’ve had a claim and realize you don’t understand any of the policy’s terminology. Vargas & Vargas Insurance is committed to making sure you have all the tools you need (and a full understanding of common condo insurance coverage terms) to make the best decisions about your condo insurance coverage. Your home is important to you. Understanding your condo insurance policy is vital to making sure your home has the right protection.

Condo Insurance Coverage Terms

Bare Walls/Single Entity/All-In Master Policies

Your condo association will have a master policy in place to cover the building itself and common areas. There are multiple types of master policies. Knowing which type of coverage your condo association master policy has will help you determine what coverage you need.

Bare Walls

This coverage covers the condo building and common areas. The master policy covers everything from the sheetrock back. But the area within the bare walls is the condo unit owner’s responsibility, including light fixtures, faucets, and everything else. This is the most common type of condo association master policy.

Single Entity Coverage

In this case, the master policy covers the unit as is when the owner moves in, including cabinets, flooring, etc.

All-In Coverage

This rarest form of condo association master policy covers everything but your personal property, including any alterations and improvements you make after moving in.

Dwelling Coverage

Once you’ve determined what your condo association’s master policy covers, you are responsible for the rest. Your condo insurance policy’s dwelling coverage will cover all the permanently affixed items not covered by the master policy up to the dwelling coverage limit.

Personal Property Coverage

This includes all of your personal belongings, such as clothing, furniture, electronics, household tools, and more. It’s important to speak with your agent about items you think fall into this coverage area but may actually not. Examples might be golf carts and four-wheelers. Keeping an inventory of your personal property is important, too; you will need to itemize them in the event of a loss.

Unit Improvements and Betterments Coverage

This coverage protects the upgrades you’ve made to your condo unit, which your condo association’s master policy might not cover. This could include upgraded flooring, cabinetry, light fixtures, or faucets. You’ve worked hard to make your condo personalized for your family. So make sure those upgrades have coverage.

Liability Coverage

While the condo association master policy may provide some coverage for liability incidents on common property, that doesn’t release you from responsibility for liability within your residence. In a condo, your liability risk increases due to the proximity of other condo units. Liability coverage provides legal protection up to your policy limit. Most policies come with a basic amount, but you can increase it for a minimal additional premium.

Additional Living Expense/Loss of Use

When a claim occurs, your condo may not be inhabitable for a time. This is why Additional Living Expense coverage, also known as Loss of Use coverage, is so important. This coverage will help with the cost of displacement up to the time period specified in the policy.

Endorsement

An endorsement is an addition to your condo policy. You may need more coverage than allotted in your basic policy in a particular coverage area. Endorsements allow you to add that coverage. A common example is jewelry. Most policies provide a limited amount of jewelry coverage but allow more coverage through endorsements.

Exclusion

An exclusion is a coverage area that is specifically not included in your policy. Your policy will have a list of exclusions. It’s imperative to review these exclusions because there are often options to provide coverage for the excluded perils separately. One example is flooding. A flood is usually an excluded peril; however, flood insurance is available as a stand-alone policy.

Inflation Protection

The cost to repair or replace damage to your home and belongings does not stay static. So most condo insurance policies include inflation protection, which raises your coverage in small increments each renewal, as needed, to keep pace with inflation.

Risk/Peril

A risk is the possibility of something unexpected happening. A peril is the cause of something unexpected happening. For example, the peril of a fire increases the risk of damage to personal property. Knowing what perils are covered under your policy is imperative for you to have proper protection from the risks you face as a condo unit owner.

For more condo insurance coverage terms, see part one of Condo Insurance Terms You Need to Know. Condo insurance coverage terms can be intimidating while also being vitally important. That’s why Vargas & Vargas Insurance, a premier local independent insurance agency, is here. We will customize your insurance coverage to your specific needs at the right price and are here to answer all of your insurance questions. Contact us today.

Condo Insurance Terms You Need to Know, Part One

Posted on May 11, 2021April 19, 2021 by cvargas

Your condo is your home. It’s the place where you make memories. Insuring it properly can be confusing because condos are a little more complicated to insure than your typical home. Condo unit owners share responsibility for the home with the condominium association. What does this mean, and how does it affect your insurance? Vargas & Vargas insurance can help you navigate the often confusing world of condo insurance and condo insurance terms.

General Condo Insurance Terms

Condo

A condominium (condo) is a unit that is individually owned within a building that contains other units, which are also privately owned. All unit owners share ownership of commons areas, including pools, gyms, playgrounds, etc.

Insured/Insurer

The insured is the person coverage is being provided for, generally the owner of the condo. The insurer is the insurance company providing the coverage for your condo.

Additional Insured

The declarations page will list the additional insured, along with the insured. The additional insured is anyone else other than the condo owner who has a legal interest in the home. The most common additional insured for a condo policy is the mortgage company. An additional insured will be notified of the policy renewal and if the policy is in danger of cancellation. They may also be payees on larger claims checks.

Condo Association/Condo Association Master Policy

A condo association is an organization that handles the day-to-day operations and decision-making for a condo community. They and the policies they handle are the major differences between home insurance and condo insurance.

This includes purchasing a condo association master insurance policy. The master policy covers the areas common to all unit owners. The unit owners are typically responsible for everything within the unit’s walls. The condo association master policy covers the rest of the commonly owned structures. However, each policy can be different, so understanding your condo association’s master policy is essential to understand your own condo insurance needs.

Policy Period

This is the time period your condo is currently insured for, which is usually one year. Most condo policies renew automatically, assuming you continue to pay the premium.

Premium

The annual amount you pay for your condo insurance is called the insurance premium. This premium can usually be divided into convenient payments of monthly, quarterly, or semiannual installments if it’s not paid directly to the insurance company through your mortgage escrow account.

Deductible

The deductible is the amount the insured (the condo unit owner) is responsible for in the event of a claim. If a claim is less than the deductible amount, the insurance company bears no responsibility for payment of the claim. If the claim is more than the deductible, the deductible will be subtracted from the claim’s total amount before the insurer pays out. The deductible does not go to the insurance company.

All-Risk/Named-Peril

An all-risk insurance policy covers all potential causes of loss other than those specifically excluded in the policy. A named-peril policy covers events if the policy lists out those specific causes of loss. While an all-risk policy can be more inclusive, it is generally much more expensive and not as common. Most insurers choose to cover the most common risks, providing a broad scope of protection while keeping premiums affordable.

Replacement Cost (RCV/ACV)

When you purchase your condo, the sales price is based on the market value of your home. The desirability of the location and many other factors determine that price. But when you have a loss, the location’s desirability has no bearing on the cost to rebuild your home or replace your roof. That’s why it is important to understand the difference in replacement cost and actual cash value.

The replacement cost value is the cost to replace a damaged item or item, whether it be your TV or all of your belongings. The actual cash value takes into account the depreciated value of the item. For example, if your sofa is five years old, then you got five years’ worth of value from your sofa. So your company will take a deduction from the amount paid for your claim that takes into consideration the age of the sofa. Knowing which type of coverage you have before a claim can prevent many misunderstandings.

General condo insurance terms are important to know, but there are many more terms that can make all the difference in understanding your condo insurance. For more insurance terms, see part two of Condo Insurance Terms You Need to Know.

Vargas & Vargas Insurance is a premier local independent insurance agency. 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 are also here to answer all of your insurance questions. So contact us today.

Home Insurance Terms You Need to Know, Part Two: Homeowners Coverage Terms

Posted on May 4, 2021April 13, 2021 by cvargas

The only thing worse than having a homeowners insurance claim is having a claim and realizing you didn’t understand the home coverage terms in your insurance policy. Now you don’t have the coverage you thought you had. Vargas & Vargas Insurance wants you to have the knowledge you need to make the right decisions about your insurance. Arming yourself with the knowledge of homeowners coverage terms is crucial in preventing unwelcome surprises when a claim occurs.