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When it comes to issues with flooding, most people associate the widespread flood damage caused by hurricanes and major storms with states like Florida and Louisiana. However, there are lots of other states and areas that are at risk of flooding. FEMA data shows that 99% of counties in the United States have experienced a major flooding event in the past 20 years.
That includes New Jersey, where residents are at risk of being exposed to water damage as a result of flooding. However, it’s important to understand that standard homeowners’ insurance policies often do not include flood coverage, so it may be important for residents to secure flood insurance policies, which can typically be done either through an existing insurance provider or another insurer.
By obtaining a flood insurance policy in New Jersey, you may be able to avoid hardships from the financial costs of making repairs due to flooding, which can cause catastrophic amounts of water damage to your home. Read on to find out more about New Jersey flood insurance and whether or not obtaining a policy is the right decision for you.
Why New Jersey homeowners need flood insurance
According to FEMA’s historical data on flood risk and costs, New Jersey is one of the states at the highest risk for flooding. In fact, every single county in New Jersey experiences 50 or more flood events in any given year. Furthermore, the average claims payment in New Jersey is nearly $38,000. That means families who do not have flood insurance for their homes could be facing out-of-pocket costs in excess of $30,000. With so much flooding activity in the state, it’s essential for New Jersey residents to obtain flood insurance as soon as they can.
Cost of flood insurance in New Jersey
The National Flood Insurance Program (NFIP) reports that the average flood insurance policy in New Jersey costs $954 annually. However, the cost of insurance may vary depending on key factors that are considered during premium calculation. Such factors include:
- Flood risk
- Coverage options selected
- Age and design of the home
- Deductible amount
- Amount of building/contents coverage
- Home value
When to purchase flood insurance
Some homeowners may choose to put off their flood insurance needs until a major storm is expected to arrive. However, this plan can end up backfiring as most flood insurance providers require that policyholders wait at least 30 days before their policy becomes active and they can submit a claim. Since all of New Jersey’s counties experience an average of 50 floods or more throughout the year, it’s imperative that homeowners secure flood insurance coverage as soon as they own property in the state. If it’s not possible to secure coverage straight away, New Jersey residents should at least consider purchasing coverage well ahead of the seasons with the highest rainfall (late spring and summer).
How to purchase flood insurance in New Jersey
Purchasing a flood insurance policy in New Jersey is as simple as contacting your current provider to add optional flood coverage. And if your current provider does not offer optional flood insurance, you can seek out coverage through the NFIP network of flood insurance providers. There are a broad range of choices for flood insurance providers in the area due to the large number of flood events that occur in the state. Insurers typically offer two types of flood insurance policies: dwellings coverage and contents coverage. Dwellings coverage offers financial protection for structural damage to your home while contents policies cover any damage incurred to personal property within your home. Be sure to review your flood insurance policy carefully with your provider to ensure your coverage needs are met prior to a water damage event.
Frequently Asked Questions
Flood insurance isn’t mandatory in New Jersey, but if you own a home and have a mortgage loan, your lender may require you to have a flood insurance policy in order to protect the home. New Jersey is at higher risk of flooding compared to many other areas of the country, so many lenders in this state will require those at high risk of flood issues to carry flood insurance.
No, homeowners insurance does not typically cover flood damage. Renters insurance policies typically do not either. If you live in a high-risk flood area and want to fully protect your home, you will typically need to add optional flood coverage, which can generally be purchased through your current homeowners insurance provider or through an insurer listed in the NFIP network.
While FEMA does provide disaster assistance for floods that have been declared an emergency by the President, they do not provide assistance for all flooding events. That’s why it’s imperative for homeowners to secure flood insurance coverage: A flood insurance claim may be paid out regardless of whether the President has deemed the situation an emergency. That means you’ll have financial protection for any water damage your home incurs whether FEMA’s resources have been provided to your region or not.