The forced indefinite closure of many small businesses throughout the nation has caused many owners uncertainty about their ability to retain employees and successfully reopen following the COVID-19 pandemic. The Keeping American Workers Paid and Employed Act, which was passed on March 27, provides emergency funds to qualifying businesses with a maximum of 500 employees.
What Is the Keeping American Workers Paid and Employed Act?
The Keeping American Workers Paid and Employed Act is a $377 billion package of grants and loans intended to help keep small businesses across the nation functional during and after the COVID-19 pandemic. The Paycheck Protection Program, the largest section of the act, provides small businesses with loans that are to be used to continue paying employees while businesses are closed. These loans may be obtained immediately through over 800 SBA-certified banks and credit unions. Other aspects of the act include:
Entrepreneurial assistance.
Emergency EIDL grants.
Small business debt relief.
Paycheck Protection Program
Under the Keeping American Workers Paid and Employed Act, the Paycheck Protection Program will provide loans to qualifying small businesses. The amount can be as great as 250 percent of the business’s total monthly payroll. It provides temporary funds to cover employees’ salaries, tips, and benefits. In doing so, the act hopes to minimize the financial difficulties that both employees and the small business will face in the coming months.
Other Elements of the Keeping American Workers Paid and Employed Act
The act also includes several billion dollars in funds that may be used to grant immediate relief to qualifying businesses. This section allows for:
Up to $10,000 through the EIDL program.
The provision of counseling, training, and other services to struggling businesses.
The provision of sick leave.
Easier access to other loan programs.
Many small businesses will need to adjust how they handle their finances in the coming weeks and months in order to successfully reopen and stay open. However, the emergency funds provided by the Keeping American Workers Paid and Employed Act make it easier to pay bills and employees. By keeping employees paid throughout the pandemic, businesses keep their employees’ financial struggles to a minimum and increase their likelihood of returning instead of searching for new positions.
The CARES Act was signed into law today. The SBA Economic Injury Disaster Loan (EIDL) program has been accepting applications for about three weeks. The EIDL application is complicated and requires extensive information to be submitted both at the application stage and during the process of the loan request.
EIDL provides up to $2Million and rates are: 3.75% 30yrs PROFIT Businesses; 2.75% 30yrs NON-PROFIT Organizations
ALL business owners negatively impacted should immediately apply for EIDL assistance. You can find the application on SBA.gov and click on the amber-colored COVID-19 banner at the top of the page. Download the application forms, complete and sign, and upload with accompanying documentation. Be thorough for the best chance of speed and success. ALSO: check off ONLY EIDL financing otherwise your application will be held up.
From our CPA James Henderson, “there are many solutions for business owners. Some are external. Like loans, SBA or otherwise, loan modifications, tax credits, grants and vendor/landlord accommodations. Some are internal, like expense management, cash flow projections/management, client revenue deferral, new service offerings, and staff lay-offs. This crisis times scream for a holistic coordinated/planned approach, rather than a knee-jerk “get a quick loan for cheap” approach”
“I have viewed many of the seminars regarding the SBA EIDL and CARES act financing, and have several clients engaged in the process. One thing that has come up over and over again is the necessary involvement of the business owner’s CPA valued advisor to get the right program in place depending on a client’s particular circumstance. There are payroll tax credits available for retaining your workforce. And with some deeper dive, probably a lot more.”
If you do not work with a CPA, our friends at Aurora Consulting are offering free advice and an affordable consulting fee if a business needs their direct assistance to collate the information and complete and submit the application to SBA. SBA allows a consulting fee up to $2500 maximum. Linda and Trevor have agreed that they will charge only $750.00 as their consulting fee to complete and submit an EIDL application. They will accept a $250.00 upfront payment with the balance due later at a date to be agreed upon by both parties. They don’t want to negatively impact your already-strangled cashflow and are willing to work with anyone who needs their assistance. Basic advice and guidance is free of charge.
They attended a webinar provided by the Governor of Connecticut, Ned Lamont, to discuss the basics of the CARES Act to provide assistance to business owners.
Here are highlights from the webinar with more to follow in another newsletter soon:
CARES Act website is not active yet
SBA.gov website does not yet have CARES Act information
Programs will not be available for a week or two
It is recommended to apply for BOTH EIDL and CARES Act financing. Get the applications in process. Once a determination is made for approval, you should then choose which of the two loans works best for your needs.
CARES Act Loans are basically an SBA 7a Loans up to $5MM, short term loans that will be converted to grants if you retain employees.
Employee Retention: this has been most actively discussed in the media and seems to be a priority of the CARES Act financing options. That leads to other questions about how to qualify and that aspect remains to be seen based on the soon-to-be-released CARES Act guidelines from SBA
RECORD KEEPING: Step up the quality of your record-keeping in terms of Employees and Operating Expenses. A mention was made that “forgiveness” of the loan will be decided after an interview and query for proof or Employee retention and that funds were used for Operating Expenses.
SBA does not yet have a timeline when the Lender guidelines will be available to follow for lending but there is an urgent priority within SBA to coalesce the information from the CARES Act and to get information to SBA Lenders
501C3 organizations are eligible under EIDL and CARES Act
500 employees or less
They are looking to access the Small Business Owners Guide for CARES Act which should be available tonight and we will share pertinent information with you in other email newsletter updates
Linda and Trevor have been fielding calls and queries from anxious business owners all week. They are doing their best to parse the information and get ACCURATE information to you. We strongly recommend you slow-down your decision-making. We’ve already seen some business owners making bad decisions to obtain capital out of desperation. We use the phrase “EVER-EVOLVING” to describe the lending atmosphere in general, and the emergency programs specifically.
Please contact Aurora Consulting and mention that you received this message from us, please SHARE this email with anyone you feel may find the information useful.
Please reply to this message should you have any additional questions!
The Massachusetts restaurant industry is thriving, and you have invested substantial time and money into launching a successful eatery. It is important to protect your investment, but the dining industry poses certain risks that may not be covered by standard commercial property, general liability, or workers’ compensation insurance policies.
Restaurant entrepreneurs should be aware of several specialized coverages available to them:
Product Liability Coverage: The food-service industry demands rigorous health and safety standards. However, even with sound food-handling protocols, foodborne illness may strike and make guests ill. Also, cross-contamination in the kitchen may trigger allergic reactions in some diners. Product liability coverage can help insure against claims made by guests who become ill from eating at your restaurant.
Equipment Breakdown Insurance: Restaurant equipment can be expensive to own, lease, maintain, and repair. Unfortunately, this expensive equipment can break down or fail as a result of weather events or a power surge. Equipment breakdown insurance can help you cover out-of-pocket costs associated with certain instances of equipment failure.
Food Contamination Coverage: This insurance may protect against losses arising from spoilage resulting from mechanical or power failure.
Liquor Liability Insurance: If you serve alcohol, you should already maintain the liquor liability insurance required by Massachusetts law. However, you will want to check your limits and exclusions and make sure you are covered for both your on-site and catering activities.
Loss of Business Income Insurance: If your business is closed for any period of time because of property damage or severe weather, loss of business income insurance may help bridge gaps in income so you can meet your financial obligations.
Commercial Auto Insurance: You may need commercial auto insurance for company-owned vehicles like food trucks or catering vans that employees drive. If your employees use their personal vehicles to deliver food, you may require hired and non-owned auto insurance to protect against accidents caused by the employee in the course of his delivery duties.
Additional Coverage: Your restaurant likely has furniture, furnishings, and artwork, and you will want contents coverage to help pay the cost of replacing these items in the event of damage or destruction. If you lease the building in which your eatery operates, you may also need betterment coverage. This coverage provides protection against loss or damage to fixtures or improvements you have made to the space.
A restaurateur who owns her building will have different insurance needs than one who leases space in a food court. Similarly, a steakhouse that offers a selection of expensive wines may require different coverage than a deli that serves paper-wrapped sandwiches. Contact the local experts at Vargas & Vargas Insurance to ask about a customized insurance package that is suited to your specific needs.
At Vargas & Vargas Insurance, our job is to provide the right insurance policies to protect your investment into your home and to protect your family and belongings. Today, we’re talking about earthquake insurance. Before we get any farther, we should point out that most dwelling policies don’t include earthquake coverage. In other words, if a huge 8.1-magnitude earthquake were to rumble through Massachusetts and toppled your home to rubble, you would not be covered with a standard homeowner’s policy.
Earthquake coverage is a rider that can be added to any home insurance policy. It’s worth the money if you ever experience a significant loss, and it’s certainly worth the peace of mind.
Does Massachusetts Experience Earthquakes?
Yes! According to the Northeast States Emergency Consortium (NESEC), the state has felt 408 earthquakes over the last 450 years. That’s almost one per year on average. Earthquakes occurring in surrounding states, and even as far as Quebec, Canada, have been felt in Massachusetts, too.
Even though our earthquake history in recent years isn’t as scary as in other states like California, Massachusetts homeowners are always at risk of earthquake loss. Preparing for one now can protect your home later.
On Home Valuations and Earthquake Deductibles
Earthquake insurance is written based on the replacement cost of your home, not the purchase price or property tax valuation. In other words, your company will insure your home based on what it will cost to build a new home from the ground up, just like through your general homeowner’s policy.
However, deductibles work differently with earthquake insurance. You can choose your deductible to be 5%, 10%, 15%, 20%, or 25%. It’s vital that you understand these deductibles as they relate to a loss.
For example, let’s say your home replacement cost is $250,000. A 10% deductible is $25,000. Earthquake insurance won’t come into play for a small loss. If a small earthquake occurs and breaks all your dishes and some windows, the damage won’t be more than your deductible of $25,000. However, if your entire home were to turn to a pile of rubble, you’d be entitled to a check for $225,000.
Ultimately, the choice to insure your home against earthquake damage is entirely up to you. It’s an affordable addition to any homeowner policy, but it’s important to choose the right coverage for your specific property. Reach out to a licensed insurance agent at Vargas & Vargas Insurance today to learn more.
The safety of our clients and team has always been our first priority. The #coronavirus (COVID-19) has likely had an impact on our personal and business lives, and we continue to monitor this evolving situation closely.
Vargas & Vargas Insurance is prepared to have our staff work from home and will follow all instructions set forth by federal and state authorities.
We will be able to provide the same service and customer care as we have in the past. However, the situation is very fluid and we trust you will understand if it takes a little longer than usual to respond to you. There are various ways to reach our team:
Via a call 617-298-0655 Via a text 617-409-0329 Via our service center, click here Via our website, www.vargasinsurance.com Via an email to customerservice@vargasinsurance.com Or, Click here to access our online customer service center to view your insurance policies, print insurance ID cards, update your contact information, download documents, and so much more.
If you have traveled to China, Iran, South Korea, Italy, Japan, Hong Kong or have been in contact with someone who is ill because the incubation period for this virus is two weeks. Please refer to the CDC website or mass.gov as resources for any updates and refrain from any interactions with the public.
The best way to help yourself and others from spreading the virus is to practice good prevention methods.
1. Wash your hands frequently with soap and hot water for at least 20 seconds. 2. Use hand sanitizer when unable to wash your hands. 3. Sneeze and cough into your elbow, not your hands! 4. Avoid touching your face (eyes, nose, and mouth) with unwashed hands. 5. Stay home if you are feeling sick and avoid close contact with others who may be sick. 6. Clean and disinfect frequently touched objects (including cell phones).
If you are experiencing the above symptoms, please seek medical attention right away and call the healthcare facility ahead to let them know you are coming!
It is more important than ever to strengthen our social bonds. Seniors face particular health risk from this virus, yet taking precautions only reinforces social isolation. Please take the time to call, text, or send a message to your neighbors. Ask if any elderly friends or neighbors need help with grocery shopping. Remind them to stock up on prescriptions and to make provisions for child care in case they may need to seek treatment. Consider setting up a phone tree or email list for your block so that people can be in touch about what they need.
Stay healthy, wash those hands and let’s remember our neighbors!
When it’s time to pack up your suitcase and head out of a town for some much-needed R&R, the last thing you want to think about is your home’s security. In reality, however, burglars prey on houses that are obviously left unattended for extended periods of time. Taking a few simple steps before you leave town can ensure that your home and property remains intact while you are away, both from trespassers and home disasters.
Be Mindful on Social Media
You’d be surprised what people take note of on social media. Don’t publicize specifics about going out of town before or during your trip. Likewise, if you receive expensive gifts over the holidays and are soon leaving town, don’t post them on your account. Burglars look for easy targets like these.
Keep Valuables out of Sight
Close your blinds and curtains before you leave, so outsiders can’t see what’s inside. This won’t just prevent burglars from spotting valuables, such as electronics. It will also make it more difficult for them to view additional points of entry to break into.
Forward Mail and Packages
If you are expecting packages from online shopping or know your mailbox will be overflowing before your return, take the time to temporarily forward your mail to your work or a friend’s house. Packages left unattended on the front porch are not only at risk of being stolen. They are a sure sign that no one is home to retrieve them.
Have a Neighbor Watch Your Home
Ask a trusted neighbor or friend to stop by your home a few times throughout your trip. They can turn on the lights, move your car, or simply ensure that everything looks secure. Giving the impression that someone has been home is an effective deterrent to thieves.
Use Light Sensors and Timers
Installing timers and motion sensors on indoor and outdoor lights is an effective security strategy. It will make sure that anyone lurking around your yard or house is seen, as well as indicate to any potential burglars that someone might be home.
Don’t let your vacation end on a sour note by coming home to an empty or ransacked house. With these simple steps, you can reduce the risks of theft while you’re away. However, even the most cautious vacationers can experience a burglary or home invasion. Talk to our team today about the right home insurance coverage to give you more peace of mind.
Floods happen far more often than most people realize. In the United States, flooding is a factor in 90 percent of natural disasters. Unfortunately, home insurance policies do not cover flood-related losses. That’s a fact that some homeowners only find out after they’ve experienced property loss from a flood. At Vargas & Vargas Insurance, we’re here to help you protect your property before a flood.
Why You Need Flood Insurance in Massachusetts
Although properties on the Massachusetts coast have a higher flood risk, flood insurance isn’t just for people who live there. No matter what part of Massachusetts your house or condo is located in, you need flood insurance.
The National Flood Insurance Program (NFIP) has a popular adage that goes: “Where it can rain, it can flood.” It’s another way of saying every home is at risk of flooding. While your home may have a lower or higher risk than other properties, a home with no risk of a flood doesn’t exist.
In fact, flood insurance claims for properties in low-risk areas are commonplace. FEMA reports more than 1 in 5 NFIP claims are associated with properties that aren’t in the high-risk zones.
If your home is in a high-risk flood plain, you need to know what that risk level means in practical terms. According to the Massachusetts Division of Insurance, that risk level means you have a 26 percent risk of a flood damaging your property over the course of a 30-year mortgage.
Consider the town of Northampton in western Massachusetts. Many years ago, mid-March warming caused winter’s ice and snow to melt so rapidly that the Connecticut River overflowed to the extent that Northampton flooded. Today, Northampton officials are concerned that climate change could cause the town to flood again. Town officials are currently working diligently to prevent a repeat of that historic flooding. Homeowners should protect themselves for the risk of a flood in any season.
How to Get Flood Insurance
If climate change or another weather event brings flooding to your community, it’s important to be prepared. Flood insurance policies typically take 30 days to go into effect. Therefore, now is a good time to contact your local independent insurance agent to discuss your options for flood insurance coverage.
In a nutshell, Errors and Omissions (E&O) insurance is a professional liability insurance policy created to protect professionals, employers, and employees from claims of inadequate work or negligence. Here in Massachusetts, it’s a useful policy for professionals who work with contracts, finances, investments, and other risks.
In other words, if your organization could get sued for giving bad advice, or even making an honest mistake on paperwork, E&O insurance is for you. Choosing the right coverage can be complicated, so Vargas & Vargas is here to help.
Businesses That Should Have Professional Liability Insurance
Let’s imagine you own a small retirement planning firm in Massachusetts. You have two fully licensed employees. During the flu season, you and one employee are both out sick for a whole week, leaving a single employee to run the office. She’s an excellent employee. You trust her, and so do your clients.
However, the workload is too much, and your good employee makes a few honest mistakes. She provides inaccurate projections to one family and accidentally gives them the wrong answers for what their whole life insurance policies will be worth in a year. Of course, she does this all via email, and your clients have proof of her statements.
All is well until next year when those customers come back to complain they were given the wrong information! They were expecting to have much better results from their investments. They get together and hire a lawyer to sue your business.
This is when your errors and omissions coverage comes into play. It will cover your court costs (up to the limits on the policy). If you need to hire a lawyer and end up paying the difference to these clients, E&O has you covered.
Does My Business Have Enough E&O Coverage?
You’ve worked hard, and your business is growing. Congratulations! It’s probably time to review all of your commercial policies, including your Business Owners Policy (BOP), commercial liability, and errors & omissions coverage. Get in touch with us today to speak with a Massachusetts licensed insurance agent. We’d love to review your policies and get you a free quote.
It is a good time to get a home insurance review when you begin planning a room addition to the home. Let your agent at Vargas & Vargas Insurance, serving Dorchester, MA and the surrounding area, know what you are planning so that there are no gaps in the home insurance coverage.
Your agent can also review the insurance coverage that is carried by the contractor you select to do the work. This is a good double-check to make sure the contractor is carrying adequate insurance and the insurance policies are active.
You want to think about replacement cost coverage if you do not already have it. The cost of construction keeps going up. If you only insure the home for its purchased value, you may not have enough money to rebuild the home if everything is lost. The vast majority of homes are underinsured. Don’t make this mistake. Having to come up with a large amount of money, when you are already experiencing a major disaster, is very difficult.
Home insurance, during the construction of the room addition, can be adjusted to cover the progress of the job. Make sure there is a discussion of where and how any building materials will be stored and who is responsible if they get stolen.
The contractor’s insurance should cover any workers; however, your home insurance needs to protect your family and any guests that come to visit. There are extras risks when a construction project is underway to those who are on the job site. In this case, the job site will be your home.
Contact your agent at Vargas & Vargas Insurance in Dorchester, MA to have a home insurance review and to make plans for the necessary home insurance upgrades that will provide adequate protection for your new room addition as well as your home.
Near the end of 2019, the Accredited Gemologists Association (AGA) issued an alert to consumers and its industry. The AGA had learned fake gem lab reports are circulating that feature the unauthorized use of AGA’s logo. AGA’s notice is similar to an announcement the Asian Institute of Gemological Sciences issued in 2018, when that organization became aware of fraudulent lab reports bearing its logo. The following tips can help jewelry owners and consumers avoid fake gem lab reports.
1. An “AGA Lab Report” Is Always a Fake
Any report supposedly issued by the Accredited Gemologists Association or bears AGA’s logo is always a fraudulent report. The AGA is not a lab. The organization never issues gem lab reports.
2. Look Carefully at the Lab’s Name
Frequently, fraudulent labs try to confuse the public by using a name that’s very similar to the name of a respected laboratory. According to Jewelry Insurance Issues, a newsletter for the insurance industry, fake labs are using names such as GIE and GLA to mimic the name of the well-known and highly-respected GIA.
3. Research the Lab Report Number
Gem lab report numbers are checked easily online. Jewelry owners can enter the report number on the websites of trustworthy gem labs like the Gemological Institute of America (GIA), Gem Certification and Assurance Lab, and American Gem Society Lab. Researching the report number may reveal conclusions such as:
No such report number exists.
The number is associated with a report that describes a different gem.
Your report is authentic.
4. Learn Other Signs of a Fake Gem Lab Report
Reputable labs do not assign a value to the gem or carry a retailer’s logo. If either appears on the gem report, the report has not been issued by a reliable, independent gem lab.
The Takeaway
A gem lab report from an unreliable or nonexistent gem lab is completely worthless. Jewelry owners need to seek the services of a qualified gemologist who also has insurance appraisal training. The AGA maintains an online directory of accredited gemologists that can be sorted by state.
Your jewelry needs to be appraised to be properly insured at the right value. When you purchase new jewelry or receive jewelry as a gift, you should always notify your local independent insurance agent.
Young adults can save a significant amount of money by obtaining life insurance before they turn age 35. Yet, most young adults miss this opportunity. If you’re in your twenties or early thirties, it’s important to consider the financial advantages of getting life insurance now.
Your Total Lifetime Cost Is Lower
Age is the primary factor insurers use to determine the amount of your life insurance premium. Generally, the cost of life insurance increases with each year of age. For term life insurance policies, the premium remains the same for the duration of the policy. Someone who purchases term life insurance as a young adult could potentially pay thousands of dollars less than someone who buys the same coverage at an older age.
To illustrate this, let’s meet Robert and Matthew. Matthew is a healthy 30-year-old man. He purchases a 30-year term life insurance policy for $299 a year with a $250,000 benefit. His 40-year-old brother Robert is in good health, too, and he decides to get a policy with the same term and coverage amount. Robert pays a $442 a year.
Although they bought the same coverage, Matthew saves $4,290 because of his age. Also, since Matthew’s annual premium is lower, his youth would give him the advantage of paying less overall — even if he had a longer coverage period than Robert.
Good Health Has a Financial Benefit
Your health also has an impact on how much you’ll pay for life insurance premiums. Adults under age 36 are more likely to be in good health. It’s the period in your life when you’re least likely to have chronic health conditions like obesity, diabetes, or hypertension. Chronic illnesses raise the cost of life insurance.
In summary, as a young adult, you have a window to reap an incredible financial benefit by not waiting to get life insurance. Contact us today to learn more about our term life, whole life, and universal life insurance services.
If you’re updating your home, you may have to make updates to your home insurance policy, as well. When you increase the value of your home, such as by adding square footage or doing a major bathroom renovation, you need to make sure you don’t end up underinsured. Your current policy was designed to cover the cost of rebuilding, and it needs to reflect your home’s current value accurately.
Also, some home improvement projects can actually lower your premiums if they make you less likely to file a claim. By not upgrading your policy, you could miss out on these substantial savings.
Home Improvement Projects That Increase the Value of Your Home
If you purchased your policy when you had laminate countertops and decided to upgrade to marble and high-end appliances, you added tens of thousands of dollars to your home’s value. But, if you don’t inform your insurance company, you’re left in a very vulnerable position if the worst happens and you need to file a claim. Purchasing more coverage protects the value of your home and ensures you get an adequate payout to replace any covered damage. The same is true for adding livable square footage by renovating a basement or building an addition.
If you add a pool, updating your insurance becomes crucial: swimming pools are a potential hazard. To have peace of mind, consider adding liability insurance included in your policy.
Upgrades That Can Lower Your Premiums
Your home insurance policy isn’t just calculated based on your home’s value. It also considers how likely you are to file a claim. Getting a new roof can help you qualify for a lower rate, especially if you have an older home. Roof damage from rain and snow is one of the biggest reasons that homeowners file a claim, and your roof is now better able to withstand extreme weather.
Upgrades to your security, such as a burglar alarm, are another potential investment that can lower your rate. Modernizing older heating, plumbing, or electrical systems can result in a discount if there’s less risk of fire or water damage.
At Vargas & Vargas Insurance, we’ll be glad to give you detailed guidance about the right policy for your current home’s value.
As insurance agents, we get requests for quotes from first-time homebuyers all day long. It’s essential to remember that these folks aren’t insurance agents or realtors. They may not understand how home insurance works, what it covers, and why they need it. Many first time buyers will assume a home insurance policy is just like an auto policy.
Vargas & Vargas Insurance is here to help! With this blog, we’re going to cover a few concepts every agent should be reviewing with first-time homebuyers.
1. What Is Replacement Cost Value vs. Actual Cash Value, vs. Purchase Price
Most home insurance policies are written at Replacement Cost (RCV). It’s crucial to explain to new buyers that we’re insuring the home and its contents for what we estimate it will cost to replace the home with a brand new home and brand new contents on the same piece of property.
This is important because:
Many buyers assume we’re insuring a home for Actual Cash Value (ACV) — what the building is worth today, considering depreciation.
Buyers may not understand that the purchase price of the property does not equal the cost to replace the home completely.
The purchase price of a property and replacement cost of a home are not the same thing.
2. Are Their Vehicles Covered When Stored in Other Structures?
First-time buyers might think that their stored vehicles, which aren’t insured with an auto policy, will be covered by Other Structures coverage. This is not the case!
Possibly. Swimming pools present a significant risk, even when they’re empty. New homebuyers should consider purchasing an umbrella policy if the home has a swimming pool.
4. Is Your Client’s $10,000 Diamond Engagement Ring Covered?
Generally, no. Most home insurance policies will set a specific limit on valuables like:
Jewelry
Furs
Cash
Musical instruments
Artwork
Ask your prospective client if they own these sorts of expensive items, and explain what the limits of coverage are. If your customers do have these sorts of belongings, often in the form of precious wedding jewelry, they probably need a Personal Articles Floater (PAF).
Be sure to put notes in their file, describing your conversation. At Vargas & Vargas, our goal as insurance agents is to be sure that customers have the protection they need so that they won’t face any surprises. Check out our blog for more great insurance topics, or get in touch with us today.
If you are purchasing your first home through a home loan, you will need to show proof of home insurance to your lenders before they can finalize the loan.
Since lenders do hold a lien on your property until you finish paying off your loan, having clients under home insurance is in their best interest. This can help protect the equity they have in your home in case of damages, such as electrical hazards.
While you might not always need to have insurance if you are paying your home through an unsecured line of credit or with cash, it pays to invest in it. Home insurance helps keep your home protected. When shopping for insurance, comparing prices and policies makes it easy to pick an insurance policy that covers your home optimally and is affordable enough.
Here are some insights on finding home insurance:
1. Pay Attention to the Limits
Home insurance coverage is divided into categories. Typically, any personal belongings you own will be covered under Coverage C of your insurance (personal property), and it pays to ensure that the limit will be enough to cater for what you own. However, some items, such as jewelry, will fall under a category containing a sub-limit, which tends to be set by your insurance company. If the sub-limit isn’t enough for such valuables, you have to add a rider for protection.
On the other hand, coverage E (liability) will protect your liability in case someone gets injured by accident in your property. When picking insurance, ensure that the liability limit awarded is enough to cover all your assets. Since most insurance policies set their liability limits at half a million dollars, you should consider buying umbrella insurance for extra coverage if this limit will not be enough for your property.
2. Understand Your Deductibles
Deductibles in insurance are the amount of cash you will pay out of pocket to cover any damages. When setting your deductible, choose a figure that is right into your budget. Unlike car insurance that fixes the deductible to a specific amount, home insurance deductibles might vary.
Some policies wills set your deductible at a percentage of your dwelling coverage. Others tend to have a split deductible system, whereby most claims will work under a set dollar deductible amount, while some claims (such as wind damage and other perils) may work under a percentage.
Also, some carriers might include a wind and storm deductible — or a named storm deductible — as a percentage of your dwelling coverage. To save on insurance costs, you can always increase your deductible. But it might be wise to save an amount equal to the deductible in a savings account for a rainy day.
3. Beware Of Exclusions
In some states, insurance agencies might exclude certain things from your policy. Under most policies, landslides, mudflows, and even earthquakes might be excluded. Flooding, in particular, isn’t always covered. For instance, in Massachusetts, earthquakes and floods are excluded. Even though you do not live in an earthquake or flood-prone area, it might be wise to purchase the extra coverage to eliminate the financial risks. If you think you need coverage for an excluded peril, talk to your agency about purchasing the ad hoc coverage.
The future is not set in stone. It can be very easy for a disaster to destroy your most prized investment: your home. Home insurance ensures that you can protect your investments. If you want to buy home insurance or get insights on how to save on insurance, feel free to contact us.
When it comes to classic cars, they are in a unique category for insurance. It needs to be protected if you want to drive it. It doesn’t matter whether it is a vehicle that you lovingly restored yourself or if you just enjoy the nostalgia of driving a classic around. Policies for classic cars differ from the policy you have on your primary vehicle. The insured value listed in the policy will be an agreed upon amount. Also, classic cars tend to increase in value whereas modern vehicles depreciate over time. In the Dorchester, MA, our agents at Vargas & Vargas Insurance can explain your policy options to get your vehicle covered.
In order for a vehicle to qualify for classic car insurance, there are several requirements. The owner must prove that the vehicle is not their primary car. They also need to show that it is driven only occasionally. For instance, traveling to car shows. When it is not on display, it has to be stored in an enclosed garage or storage building. Most consider these requirements relatively minor.
Other than that, class car insurance has traditional auto insurance features. You can et comprehensive and collision insurance. Some offer roadside assistance or a flatbed towing in an emergency. Special coverage options include auto show medical coverage and protection when the vehicle is displayed when you are not at the show.
Our agents at Vargas & Vargas Insurance in the Dorchester, MA area can help you get the coverage that you need for your classic car. Visit the website to get started then call or come by to talk with one of our agents. You wouldn’t trust your restored beauty to just anyone. Trust it with the classic car insurance experts. Come in today for the coverage of your classic car needs!
If you’ve been looking at houses, you’ve probably seen real estate websites where the estimated monthly payment is shown. This is a great feature for breaking down the cost of a home that you will pay off in 15 or 30 years, and it can help you stay within your budget.
Monthly house payments include your mortgage payment, a portion of your property taxes, and your homeowners insurance premium.
However, it doesn’t always show the whole picture. The estimated payment only factors in the cost of the loan for a traditional 30-year mortgage at the current interest rate. It does not include the other costs that are factored into a standard monthly house payment. Two additional costs include:
Property taxes
Homeowners insurance
Property Taxes
Just like everything else in life, having property is also taxed. When you take out a mortgage loan, the property taxes are calculated into your monthly loan payment and put into an escrow account. When your taxes become due, your mortgage company makes the payment for you.
The percentage of taxes you owe depends on where your property is located, and this can be checked prior to purchasing a home.
Although it may seem like a negative, having your taxes included in your monthly payment is actually a great way to stay organized. It takes away the burden of paying property taxes in one lump sum. Also, you don’t have to worry about whether you made the payment or not. (And if you love your home, you definitely don’t want to forget paying your property taxes!)
Homeowners Insurance
The other cost that goes into your monthly mortgage payment is homeowners insurance. It is standard for the insurance cost to be part of your mortgage payments, and mortgage lenders will often not loan you money if you do not have it. If anything should happen to your property, the lenders want to make sure that they can recover their costs. However, having the right home insurance policy isn’t just for them — it’s for you. You’ll want to be protected in case your home is damaged, and the right homeowners insurance policy can give you peace of mind.
You get to pick out the home insurance policy that works for you, and you should have it ready at the time of your closing. Here at Vargas and Vargas Insurance, we can guide you through the process. Contact us today for more information.
Insurance is vital, regardless of whether you own a home or a condo. It can help offset damages to your property, so you don’t have to worry about paying for those damages out of your pocket.
Protect your new condo by learning how condo insurance is different from home insurance.
However, the type of insurance you choose will dictate how any damages to your property will be handled. While both home and condo insurance might cover your property, there are some subtle differences between the two. Here is how home and condo insurance differ:
Condo Insurance
Condo insurance covers any non-communal property that you use as a property owner. Ideally, it should cover certain ‘walls-in’ losses, replacements, and repairs, as well as your personal property. For any damages that happen outside your unit walls, the condo association’s master insurance policy should offset them. But you should always verify the details before you purchase a condo or change your insurance policy.
Condo insurance also comes with loss assessment coverage. In situations where the condo association levies condo damage fees on all unit owners, this will cover the ad hoc fees. Condo associations will typically do this if the cost of offsetting damages to the communal assets is more than what their master insurance policy covers.
Home Insurance
Traditional home insurance tends to be for single-family dwellings, and it can be as simple or complex as mortgage lenders allow it to be. It should cover your entire home structure, including construction materials and other permanent elements. Most insurance policies also cover any personal property that is valued at 50% or greater of the insured home itself. The insurance can also cover other structures within the vicinity, such as detached garages and sheds.
Filing Claims
Filing claims is typically easy for home insurance, as it can be made directly with the insurers. On the flip side, there are some complexities in filing claims through condo insurance, and the specifics will depend on the situation.
For instance, the condo association insurance should take care of water damages as long as they are as a result of burst pipes outside your condo walls. Your condo insurance will, however, take care of damages arising from burst kitchen sink pipes, as they are within the unit’s walls.
Insurance policies tend to have rules that property owners have to adhere to for an easy claiming process. Regardless of the insurance policy you have, it pays to follow these rules. Be sure to read through the fine print of your insurance policy documents to choose the right coverage. If you have any questions about condo insurance or you’re looking for a new policy, we’re here to help. Contact us online or at 617-298-0655 to talk to our team.
Car insurance is something that we have to have if we legally want to be able to drive our automobile. However, we have all been in situations where we forget to pay for it. Car insurance is something we know we need, but it often falls through the cracks. We either have it or we don’t, but most people generally don’t think about it.
Talk to your insurance company about your options instead of letting your car insurance lapse.
Did you forget it, or were you out of town and fail to see the “due by” notices? Maybe you moved, and the notice got lost in a moving box. Either way, it can be a frustrating mess. But don’t just let your coverage lapse. Here’s what you can do instead.
The Right Way to Handle Car Insurance Cancellations
In Massachusetts, a car insurance provider has the right to cancel your car insurance for lack of payment. However, they will send you a warning ahead of cancellation. Insurance providers are obligated to give you a notice 20 days in advance of the cancellation.
This means if you fail to pay by December 1, they can send out a notice giving you until the 21st of December. Failure to pay by the 21st will mean that your policy ends and you are no longer covered.
If you are unable to pay and wish to avoid cancellation, there are a few things you can do. They include:
Contacting your insurance provider
Asking for a negotiation to keep your policy active
Providing proof of why you lapsed in payment (for example, in the event of a hospital stay or a family emergency)
Often, if you talk to your insurance representative, you can get your coverage reinstated if you show good cause. Otherwise, you can appeal through the Board of Appeals.
What If I Want to Just Cancel My Policy?
Once you receive a cancellation notice, it can be tempting to just let it happen and search for new coverage. But you should never allow your policy to lapse. There’s a right way and a wrong way to cancel a policy that you no longer want.
The Right Way: If you want to improve your coverage by switching to a new company or policy, you are legally able to do it. There may be a penalty for canceling mid-policy, but it is still better to avoid the company canceling. Contact your insurance provider and explain to them why you want to cancel and ask about the penalty cost for doing so. You can also choose to cancel as your policy ends, especially if you are just changing companies.
The Wrong Way: Simply allowing your insurance company to cancel your policy may come with some pretty nasty consequences. Your insurance providers are obligated to tell the Massachusetts Registry of Motor Vehicles (RMV) if your policy lapses, which could result in you losing your license. If you are caught driving without insurance coverage, you could face fines and more. It is topped off by the fact that a lapse will impact your credit rating.
Plan Before You Cancel
Canceling a policy should never be done without thought. If you are switching companies, look at your current provider’s penalties for canceling an existing policy. You may also consider having your new insurance company talk to your current provider to resolve the issue. This will prevent cancellation penalties and ensure a gap-free transition.
If you are considering changing your insurance policy, Vargas & Vargas Insurance is here to help. You can contact us or request a free quote.
Updating your home insurance gives you better protection and can even lower your premiums!
Home improvements can change more than your home. The truth is, even a kitchen upgrade can increase your home’s efficiency, value, and more. That means you need to consider how the increase in value can impact your home insurance policy. Not considering it can make it impossible for you to get everything you deserve if you file a claim. It can also mean you pay more than you have to for insurance coverage. Why risk it?
What Home Improvements Require Changes to Home Insurance?
Let’s say that, within the past few years, you have invested money into your home to upgrade your kitchen, home office, and your roof. You may not think about them being a total cost, but each improvement adds up. It is easy to spend over $100,000 on improvements.
This amount, whether the work was done recently or over the last ten years, means that you should reconsider your insurance policy. Some improvements may increase your policy cost, but others may lower it drastically.
Improvements That Make a Difference
To help you see how certain things can raise or lower your home’s value according to your insurance, you have to look at the premium you pay. Most home improvements will lower the cost of your premium, but it is always best to be covered. Home improvements that reduce the risk of claims, for example, can lower your premium.
Improvements That Can Lower Home Insurance Premiums
Improvements That Can Increase Home Insurance Premiums
New Pool
Home Additions or Decks
Kitchen Remodels (May Raise or Lower Premiums)
This list is not all-inclusive. Your insurance company can tell you what other updates and renovations may save you money on your home insurance premium.
Why Risk Paying More?
Many people wonder why they should pay more for homeowners insurance if they have already paid to renovate their home. The answer to this is simple. If you upgrade your kitchen with granite countertops, all new appliances, and more, what happens if a tree falls on your roof? You risk losing your improvements because nothing is documented as it should be.
Your insurance company will only cover the cost of what your home was valued at when you purchased insurance. If you have no record of the renovations, you lose out on being able to collect money from your investment.
With other additions, such as a pool, you may need to add insurance coverage to ensure you are not liable for accidents. This would mean the addition of umbrella insurance, but it could save you a lot of money if something unfortunate happens.
In life, there are no guarantees. Vargas & Vargas Insurance can help you decide what type of home improvements require you to make changes to your home insurance policy. No matter how long ago or how soon you plan to remodel, we’re here to help.
There comes that time of year when your Homeowner’s Insurance Renewal arrives in the mail. You’re happily buzzing through your day when you read the bad news: your premium is increasing!
Panic sets in, then a fair amount of anger, and possibly a bit of anxiety.
Whether your insurance is included in your mortgage payment through an escrow account, or you pay it separately on your own, panic sets in because you know this increase will impact your household budget.
Anger arises due to the unfairness of this rate increase. “How dare they!” “Why are they doing this to me?”
The anxiety is the worst part, but also the possible best part of your response to the premium increase. Anxiety emerges because you truly don’t know why, nor do you understand, why your insurance carrier would increase your premium in such a seemingly arbitrary way. But that same anxiety can fuel your desire to learn the answer to that question, and then to drive you forward to take action and seek a favorable resolution.
Here are 4 reasons why your Insurance Carrier might increase your Homeowner’s Insurance Premium; the second one will knock you out of your chair!
Claims. Have you had a claim in the past twelve months? This is one of the most common reasons for a premium increase. But this doesn’t always have to be so! First, query your Insurance Carrier to determine if there are actions you can take to resolve the issue around the claim. For example, if the claim was due to a burglary, maybe installing a quality security system can relieve the premium-increase-pressure. If that doesn’t work, calling your Independent Insurance Agent is a great solution! Your Agent can either advocate on your behalf with your current Insurance Carrier, or, find another Homeowner’s policy at a lower rate.
Credit Score. Insurance Carriers use a specific “Insurance Score” to predict the likelihood of a future claim. The Insurance Score is different thanyour Credit Score, but uses similar methodology to create a score based on multiple data points. Generally speaking, if you have good credit, then you’ll have a good Insurance Score. But the Insurance Score is out of your control unlike your consumer credit score. With a consumer score, in the event of an error on your credit report that impacts your score, Federal Regulations permit you to dispute the error and work on restoring your good score. Your Insurance Score, on the other hand, is an unknown to the consumer. To prevent arriving at a lower Insurance Score, monitoring and maintaining your consumer Credit Score is important. Find out more at the Federal Trade Commission website here.
Construction Costs. Your Homeowners Insurance coverage is based on a calculation to repair or rebuild your home in the event of damage or disaster. Therefore, the costs of materials and labor specific to your area can impact the calculation of those repair/rebuild costs. If your local construction costs have increased due to market conditions, then it is a good likelihood your Insurance Premium can increase also. The good news is that your Independent Insurance Agent can review your entire policy. We recommend a Twice-Yearly Review to determine if there are other areas of your policy where you can derive savings to offset any such increase in your annual premium.
One of the most popular reasons for a rate increase is…..drum roll: “State Filed Rate Increase“. The insurance carrier will file a request with the state to allow for an increase on their policies that affect all policyholders. The only way around this is to call your independent insurance agent so they can shop other carriers who are competitive. Even after a filed rate increase, most insurance companies will eventually revamp their product portfolio to be more competitive. It’s basically a vicious circle.
Bottom Line: Reduce your anger, panic, and anxiety from an increase in your insurance premium by contacting your Independent Insurance Agent for the best and most expert guidance.
Contact our team at Vargas & Vargas Insurance to learn more about the benefits reviewing your insurance portfolio and what other options you have to reduce this emotional event.
