An independent insurance broker is an agent who provides a wide selection of policies from many different insurers to satisfy the customer’s requirements. On the other hand, captive agents or direct writers, including companies such as Allstate, Liberty Mutual, Farmers and USAA and Amica among others, are dedicated to one particular insurer and only offer that company’s insurance products.

How much does it cost to work with an independent insurance broker?

Using an independent insurance broker does not come at any additional cost compared to dealing with a direct write or captive insurance agent or going to the insurance company directly. We can make the process simpler for you by obtaining quotes from a variety of insurers, and we may even be able to find you a better deal than if you were to shop around on your own.

Why work with an independent insurance broker?

Unlike major national insurers who need to invest huge amounts of money in advertisements instead of their communities, our drive is to offer customized service and the most competitive rates for our customers in our community. And we are involved in our community. We contribute to local companies, charities, and other groups and provide advice and assistance. We hire and spend our income in our communities.

Having more options

Having a variety of options is always beneficial. A local independent insurance broker can help you get the best-tailored coverage at an affordable rate. As opposed to being tied to one specific insurer, we will be able to partner with you to figure out the best policy for your needs.

As an independent insurance broker we are called “independent” because, unlike captive agents and direct agents who only represent one company, we have the flexibility to shop around and find the best coverage from many different insurance companies that fits your individual needs. We take the time to understand your unique situation and identify the coverage that best meets your requirements.

We’re Your Advocate

Working with an independent insurance broker has many more additional benefits, like We may be able to provide discounts and other advantages that large national companies cannot.

Working with an independent insurance broker has additional benefits.

The customer service provided by Vargas & Vargas Insurance is unparalleled. An automated chatbot may be able to provide a polite and friendly interaction, but nothing can replace the human connection and personal relationships.

Our team will stay with you through all of life’s ups and downs. You are welcome to contact us whenever you need help – whether it’s finding insurance for a new driver, buying a new home, filing an insurance claim if something unexpected happens, or anything in between. We make ourselves available via phone, email, text message or face-to-face meetings. No request is too big or small – we will review your policy details and refer you to experienced professionals such as real estate agents or mortgage lenders.

The right insurance at the right price for you

An independent agent has access to a variety of insurance carriers and coverages, which is an important distinction to note. This is because it will likely save you time, money, and frustration in the future. Gone are the days of trying to find another insurance agency to work with. At Vargas & Vargas Insurance, we don’t settle for good enough or one-size-fits-all. We are committed to finding you the right coverage at the right price.

We know you

And as an independent broker can serve as your insurance advocate over the course of your life. This local expertise can bring many benefits, such as getting to know you personally and understanding the changes in your life and circumstances over time. We offer advice and guidance and may have information about particular risks in the vicinity, which can aid you in preventing any gaps in your insurance protection.

And we always have time for you. You can reach Vargas & Vargas Insurance at 617-298-0655 and be glad that you did.

Selling a home can be both exciting and stressful. There are common mistakes that often result in costly outcomes, so it’s important to do your research before beginning the process of selling your home. Taking precautions will ensure a smoother sales experience with greater financial rewards.

Selling without the Use of a real estate agent

Real estate agents possess a wide range of knowledge and expertise to help you get the most out of your home sale. They are familiar with local market values, have experience selling homes and can point out flaws that need attention before listing. Agents also leverage their professional networks to spread word about new listings quickly, know what makes buyers qualified for purchase negotiations and handle all legal paperwork involved in closing the deal.

When selling your own home, you are responsible for the listing, showing and legal process. However, this can be difficult due to many buyer’s agents not wanting to show FSBO homes. This limits potential buyers significantly and could result in a financial loss of between $60-90k.

Avoiding Major Maintenance

Before selling a home, renovations like new garage doors and kitchen remodels can increase the value. However, it’s important to not replace essential repairs with these improvements as buyers will usually request an inspection post-offer; poor results could lead to delays or cancellations of the deal. Doing major repairs yourself may cost more initially but you’ll have control over who takes care of them.

Failing to understand the expense of selling

Selling a home can involve more than just paying realtor commission, which is usually 3.8-4.6% of the sale price plus 0.5-2.8% in closing costs; additional expenses may include repairs necessitated by an inspection report from lenders before they approve a loan.

If you decide not to make repairs, the buyer may offer a lower price for your home. The cost of staging will depend on how many rooms and what kind of decor is needed; buyers might also ask for concessions like keeping some appliances or having the seller cover their closing costs.

Failing to Have Adequate Insurance

Even if you have already paid off your mortgage, it is important to maintain a homeowner’s insurance policy. This form of insurance not only safeguards your home and belongings from disasters, but also provides liability coverage should an accident occur on your property that causes injury to someone. Furthermore, if you have moved away from the home before selling it, the lack of occupancy may increase its vulnerability to vandalism or theft.

Discuss the details of the sale with your real estate agent before you put your house up for sale and make sure your insurance policy will give you the necessary protection during the selling process.

Failing to Get Your Home Ready for the Sale

Your home is important to you for many reasons, but potential buyers want to imagine it as their own. By taking away unnecessary objects and adding tasteful decorations, you can make your home more attractive during viewings. Clutter can give the impression that the space is smaller than it actually is, and personal items can stop people from picturing themselves living there. Research shows that staging a house before showings decreases the amount of time it takes to sell by 31%, and increases its value by 6-10%. If you don’t prepare your house for showings, you could miss out on offers and take longer to find a buyer.

The best of the BEST

Vargas & Vargas Insurance only works with the finest real estate agents, mortgage specialists, and lawyers. Please contact us if you need a recommendation for one of these professionals.

Homeowners often don’t consider the consequences of pricing a house too high or refusing to negotiate, which can lead to a prolonged time on the market and a lower sale price. To avoid these issues and make your home sale go more smoothly, it is important to prepare beforehand.

For insurance coverage that will help protect you throughout the selling process in Massachusetts, contact Vargas & Vargas Insurance at 617-298-0655, your local independent agent, today!

When your child reaches the age of 18, a lot of things change. They are allowed to move out and vote, may join the military, and even come home with tattoos or lottery tickets. It can be frightening to consider that once they reach this age, you no longer have the legal authority to make decisions on their behalf; not even in an urgent situation.

You won’t be able to access their medical, school, or financial records in such cases. We understand how intimidating this can be for parents, as many of our staff at Vargas & Vargas Insurance have children who either have become adults or are close to it.

We assist clients from all backgrounds and ages in ensuring they get the right insurance coverage to fit their family’s situation. We have put together some tips in this article that can help ensure both you and your grown child are taken care of during a crisis.

Obtain consent to disclose protected health information according to HIPAA regulations

Once your child reaches the age of 18, it is not possible for you to have access to any of their medical records. Therefore, if your child consents, they should sign a HIPAA (Health Insurance Portability and Accountability Act) release form. Once this form has been signed by your child, healthcare providers will be able to share medical information with you about them. This means that if the situation arises where your child cannot communicate with you regarding a medical emergency, their doctor will be able to inform you on what is happening.

Sign a power of attorney

Apart from health considerations, parents must also consider financial security for their child once they reach 18. If the adult child is unable to take care of their own finances, what can be done? A power of attorney allows a parent to be appointed as the designated person to handle the financial matters on behalf of their son or daughter. This would include accessing bank accounts, managing credit card companies, and taking care of contracts, loans, and enrollment agreements.

Think about getting life insurance.

It can be difficult to think about the death of your child. However, if this were to occur, you would want to make sure that you had the financial means to manage their final arrangements. As soon as your child reaches 18 and starts living independently, their chances of being in danger increase. If you are not able to pay for death-related costs at this time, life insurance may be a good option. If your child gets insurance and designates you as the beneficiary, funds will be provided upon their passing for whatever expenses may arise.

Life insurance isn’t only applicable in the event of a death. If a person has the proper riders attached to their policy, they can guarantee that they will be able to get insurance in the future as their needs change.

The cost of a life insurance policy rises with age. This means that if you buy a policy when you’re younger, the cost will be lower for the length of the policy, and no one can take it away from you as long as you continue to pay the insurance premium.

Vargas & Vargas Insurance is committed to providing assistance and support to families and individuals for more than four decades. Our staff are available to answer any queries you may have, so don’t hesitate to reach out by dialing 617-298-0655.

The Department of Housing and Urban Development has announced a reduction in Mortgage Insurance Premiums (MIP) on FHA loans. This change is set to go into effect on March 20, 2023, and will cut premiums from 0.85% to 0.55%, for most mortgages insured by the FHA. This substantial reduction in premiums is expected to save homeowners and homebuyers an average of $800 per year, which is a significant amount of money for many households.

Making Home Ownership More Affordable

HUD’s goal is to make homeownership more affordable and accessible for all. This could be done by reducing the amount of money that is needed downpayment or closing costs. This would help stabilize the housing market and make it easier for more people to get into it.

What Does This Mean

The FHA mortgage insurance premium reduction means that borrowers will now be able to purchase homes with a down payment as small as 3.5%. This is great news for those who are looking to purchase a home, as it becomes more accessible with this reduction. Additionally, the interest rates are lower this spring, which makes it a good time to buy a home.

At Vargas & Vargas Insurance, we understand the importance of saving money, especially when it comes to your mortgage payments. With the recent rule changes, you can expect to save money on your monthly mortgage payments, which could add up to big savings over the life of your loan.

But that’s not all. We can also review your Home, Automobile, Business and Life Insurance policies to make sure that you are properly protected at the best possible price. We are committed to helping you save money wherever we can.

Contact our team today at 617-298-0655 to learn more about how you can save money on your mortgage payments and other insurance coverage. Our knowledgeable staff is always available to answer any questions you may have and to provide you with the best advice for your individual situation. Don’t wait any longer – call us today to get started!

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.

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.

Contact us today 617-298-0655

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.

Call us 617-298-0655

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:

https://secure.rmv.state.ma.us/PlateReturn/intro.aspx

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.

An escrow account is like a holding tank.

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.

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.

Economic downturn/insecurity,

Financial markets turbulence,

Dwindling insurance capital/lessened rivalry,

Disastrous occurrences/heightened claims activity,

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.