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New Jersey flood insurance
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Flooding can cause devastating damage to homes. Because of the state’s location, New Jersey homes have a higher risk of flooding than those elsewhere. Flood insurance is one of the main tools that homeowners can use to help mitigate the financial risks associated with flood damage.
Do you need flood insurance in New Jersey?
Flood insurance is predominantly sold through the Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program (NFIP). However, some private insurers sell flood policies, too.
New Jersey is one of the highest-risk states for flooding, according to historical data from FEMA. In fact, every NJ county experiences 50 or more flood events in any given year. For this reason, New Jersey homeowners may want to consider flood insurance.
Note that standard homeowners insurance policies typically do not include flood coverage. It must be purchased separately.
Cost of flood insurance in New Jersey
FEMA uses its Risk Rating 2.0 system to assess homeowners’ risk and calculate flood insurance premiums. The NFIP reports that the average flood insurance policy in the United States costs $700 annually. However, your premium may vary depending on key factors, such as:
- Location
- Flood risk
- Coverage options selected
- Age and design of the home
- Deductible amount
- Amount of building/contents coverage
- Home value
To find out more about the flood risk in your location, you can use FEMA’s flood map tool.
When to purchase flood insurance
Some homeowners may choose not to purchase flood insurance, then change their minds when a storm is approaching. However, this plan can backfire. Most flood insurance providers require policyholders to wait at least 30 days before flood insurance becomes active. So, it’s typically better to secure flood insurance as soon as you buy property in the state.
If you purchase a home using a mortgage loan, your lender may require flood insurance. This protects them financially in the event the property is damaged by flooding and you can’t afford repairs or replacements out of pocket. The higher the risk of flooding in your area, the more likely it will be that flood insurance is required by your bank.
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. If your current provider does not offer flood insurance, you can turn to the NFIP network of flood insurance providers.
Insurers typically offer two types of flood insurance policies — building coverage and contents coverage:
- Building coverage offers financial protection for structural damage to your home for things like the foundation, permanent carpets, appliances, permanent cabinetry and more.
- Contents coverage applies to personal property like art, jewelry, rugs, microwaves, washers, dryers and more.
Building coverage generally covers up to $250,000, while contents coverage is usually limited to $100,000. Experts recommend reviewing your flood insurance policy with your provider to ensure your coverage needs are met.
If you want to save money on flood insurance, there are a few tips that may help per FEMA and NFIP experts. Recommendations include lowering your flood risk, increasing your deductible, obtaining an elevation certificate for your property and participating in community flood mitigation efforts.