Whether you’re purchasing a starter home for your young family or a retirement cottage in Long Beach Township, you need to protect your dwelling with adequate home insurance. Finding the best New Jersey homeowners insurance is not difficult, but you need to understand the risks your property might face to determine the levels of coverage you need.
Based on 2018 census data, New Jersey has a homeownership rate of around 64%, slightly higher than the national average. The median home value in the Garden State is over $320,000, compared to the national median of $193,500.
According to the Insurance Information Institute, New Jersey insurance providers wrote $21.2 billion in property and casualty policies in 2017. The same year, insurers incurred $11.7 billion in losses. Nationwide, fire and lightning cause the most insurance losses, but New Jersey also has a history of natural disasters. Hurricanes, storms and wildfires have accounted for most of the state’s catastrophic losses. Hurricane Ivan devastated the Jersey coast in 2004, followed by the infamous Hurricane Sandy in 2012.
When you shop for New Jersey homeowners insurance, consider a few important factors:
- Purchase adequate coverage to rebuild your home.
- Purchase enough insurance to replace your valuable belongings.
- Consider purchasing additional coverage for your most valuable personal possessions.
- Assess your need for flood insurance.
- Set deductibles that fit your budget, without compromising protection.
Best home insurance companies in New Jersey
Annual premium rates are important, but you need to consider factors such as financial ratings and customer service when considering a New Jersey homeowners insurance company. J.D. Power produces an annual survey of home insurance companies. Using a five-star rating system, Power ranks companies based on pricing, policy offerings, customer interaction, claims handling, billing process, policy information and overall customer satisfaction.
In its 2019 U.S. Home Insurance Study, the best New Jersey homeowners insurance companies included:
- Amica Mutual: Amica Mutual earned the #1 J.D. Power rank, with five stars in all categories, making it the best overall home insurance company. We agree, and particularly like the generous coverage levels offered in its standard policies.
- USAA: USAA also earned five stars in all categories, but it does not qualify for J.D. Power ranking because it only offers products for military members and their family members. For those who qualify, USAA offers one-stop shopping for financial products, including home mortgages, credit cards, savings and checking accounts, retirement plans, life insurance and investment plans.
- Auto Club of Southern California Insurance Group (AAA): AAA came in third in the Power survey, with a four-star rating for overall satisfaction. AAA is a great option for folks who already have an auto club membership because they could qualify for a 10% discount right from the start. But some people can also qualify for discounts based on their age or for buying newer, well-constructed homes.
- State Farm: State Farm ranked fourth in the Power study with a four-star overall satisfaction rating. We like State Farm’s flexibility when setting coverage levels and its huge portfolio of products, including insurance for boats and recreational vehicles, health insurance and term, universal and whole life policies.
Allstate: Allstate earned the sixth place in the J.D. Power survey, earning a three-star overall satisfaction rating. While some other insurance companies take a low-touch approach to customers, Allstate continues to operate agencies throughout New Jersey, and we like that. Allstate also makes the claims process easy, giving you the option to call the nationwide claims center, contact your local agent or file from your smartphone using the Allstate mobile app.
J.D. Power Overall Satisfaction Rating A.M. Best Financial Rating BBB Rating Amica Mutual 5 out of 5 stars A+ (Superior) A+ USAA 5 out of 5 stars A++ (Superior) B- AAA 4 out of 5 stars No rating A+ State Farm 4 out of 5 stars A++ (Superior) A+ Allstate 3 out of 5 stars A+ (Superior) A+
Average homeowners insurance cost in New Jersey
New Jersey homeowners pay an average annual homeowners premium of $934, according to The Zebra, a private organization that researches insurance markets.
The most affordable New Jersey home insurance markets include:
City Average Annual Rate Fort Lee $831 Hackensack $843 New Brunswick $867 Linden $877 Perth Amboy $895
Rates in New Jersey’s largest cities, Jersey City and Newark, trend a bit higher, depending on the level of coverage:
City Dwelling Coverage Average Annual Rate Jersey City $200,000 $756 Jersey City $400,000 $1,331 Newark $200,000 $796 Newark $400,000 $1,404
Among neighboring states, New Jersey’s rates fall slightly lower the median:
State Average Annual Rate Connecticut $1,481 Maine $961 Maryland $1,203 Massachusetts $1,203 New Hampshire $876 New Jersey $934 New York $1,262 Pennsylvania $851 Rhode Island $1,388 Vermont $733
Home insurance coverage options in New Jersey
Nationwide, the H0-3 policy is the most popular, covering losses caused by:
- Aircraft, falling objects and vehicles.
- Explosions, fire, lighting and smoke.
- Hail, wind and volcanic eruptions.
- Leaking heating and air conditioning systems, home appliances, internal plumbing and sprinkler systems.
- Riots, theft and vandalism.
- Weight of ice, sleet and snow.
Standard home insurance policies feature coverages that protect your home, its contents and your other assets. It can include:
- Dwelling coverage: This coverage pays to repair or replace your home’s structure, including attached carports and garages.
- Other structures coverage: This covers unattached structures, such as fences, guest cottages and sheds.
- Personal property coverage: Personal property insurance pays for your home’s contents, including appliances, clothing, electronics and furniture if it gets stolen or damaged.
- Loss of use coverage: This insurance helps pay your temporary living expenses if a fire, storm damage or other calamity renders your home uninhabitable.
- Personal liability coverage: This pays for injuries or awards when a court rules you are liable for an incident that occurs on your property.
- Medical payment coverage: This covers the medical expenses of a person outside your household who sustains an injury on your property.
Personal property coverage imposes limits on losses to certain types of property. For instance, your home insurance policy may limit jewelry claims to $1,500. Homeowners who have many expensive belongings should add endorsements – also called floaters or riders – to their coverage. An endorsement increases the amount of coverage for a specific type of property. You can add endorsements for items such as collectibles, firearms, furs, home office equipment and silverware.
Many insurance companies offer identity theft coverage for homeowners customers. Typically, you can purchase identity theft insurance for $25 to $65 per year, with coverage ranging from $15,000 to $30,000.
Because New Jersey homes face the risk of severe storms and hurricanes, decide whether you need to increase your coverage for hail and wind damage. Standard home insurance policies do not cover flood damage. If you own a home in a low-lying area, or a region with a history of flooding, consider purchasing flood insurance through the National Flood Insurance Program, which is administered by FEMA.
Common causes of home insurance losses in New Jersey
Storms and hurricanes pose the highest risks to New Jersey homeowners. According to the III, nearly 100,000 New Jersey homes face the risk of damage or total loss due to hurricanes. In 2012, Hurricane Sandy caused an estimated $29.4 billion in damage in New Jersey.
Future hurricanes are inevitable. According to the National Oceanic and Atmospheric Administration’s Office of Coastal Management, New Jersey ranks among the top five states most vulnerable to catastrophic hurricane losses, with more than $710 billion in property at stake.
Compared to states such as California and Nevada, wildfires pose a moderate risk to New Jersey properties. For example, in 2018 California experienced over 1.8 million wildfires, while New Jersey had 625. New Jersey only occasionally experiences tornadoes, with none reported in 2018.
Frequently asked questions
What is the cheapest homeowners insurance in New Jersey?
Home insurance rates are subjective because factors such as location and construction can greatly affect premiums. To find the cheapest homeowners insurance in New Jersey, determine the amount of coverage you need, and then shop around for the best combination of value and protection.
How do I get homeowners insurance in New Jersey?
New Jersey has no shortage of home insurance companies. Top insurance providers include Allstate, Amica Mutual, State Farm and USAA. For qualified homes, you can also purchase home insurance through the National Flood Insurance Program, administered by FEMA.
What is the greatest risk to New Jersey homes?
Storms and hurricanes pose the greatest risk to New Jersey properties. It’s important to have adequate coverage for perils such as hail and wind damage.
How much personal liability coverage should I purchase?
Consider the specific features of your home when determining how much personal liability coverage you need. For example, if you own a swimming pool and like to throw pool parties, you probably need additional liability coverage in case someone sustains an injury on your property. When requesting insurance quotes, pay close attention to standard liability coverage amounts. Typically, standard coverages range from $100,000 to $500,000.