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Best homeowners insurance in New Jersey for 2022
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In New Jersey, homeowners make up 63.3% of the population. That means the homeownership rate in New Jersey is just slightly below the national average. But whether you currently own a home in this state or are purchasing a starter home in Trenton or a retirement cottage along the Jersey Shore, having the best homeowners insurance in New Jersey is one of the top ways to protect your investment. The good news is that the average price of homeowners insurance in this state is $775 for $250,000 of dwelling coverage, which is significantly less than the average cost of homeowners insurance nationwide.
But price isn’t the only factor that matters when shopping for homeowners insurance. If you’re looking for the best New Jersey homeowners insurance, Bankrate may be able to help. To find the best homeowners insurance in this state, we analyzed premium information from Quadrant Information Services, along with other factors, like third-party customer service rankings and financial strength ratings, for a wide range of insurers. We also reviewed these companies for their size by market share, policy options and more. By analyzing these factors, our team found Allstate, New Jersey Manufacturers, State Farm, Travelers and USAA to be among the best homeowners insurance companies in New Jersey.
- New Jersey Manufacturers and Travelers had some of the cheapest average rates in New Jersey, according to Bankrate’s analysis of premium data.
- Both New Jersey Manufacturers and Travelers also ranked as two of the best New Jersey homeowners insurance options.
- Although New Jersey may face severe weather patterns year-round, the average cost for homeowners insurance in the state is still lower than the national average.
How Bankrate chose the best home insurance companies in New Jersey
Bankrate took a data-based approach to finding the best homeowners insurance in New Jersey. Our insurance editorial team analyzed the largest home insurance companies by market share across multiple categories, including: customer satisfaction rankings from J.D. Power, financial strength rating from AM Best, the most recent premium data from Quadrant Information Services, policy offerings and discount options.
Based on their performance in these categories, each of these New Jersey homeowners insurance companies also earned a Bankrate Score, with a maximum score of 5 points. Using our Bankrate Score can help give an idea of which insurance companies have competitive home insurance policies and can be used to compare home insurance carriers to each other.
Best home insurance companies in New Jersey
USAA, New Jersey Manufacturers and State Farm earned the top Bankrate Scores, based on our extensive analysis of third-party ratings, premium data, and other factors. Allstate and Travelers weren’t far behind. Allstate scored well in customer service satisfaction based on J.D. Power rankings and Travelers ranked as one of the cheapest home insurance rates in New Jersey.
|Home insurance company||Bankrate Score||Average annual premium for $250K in dwelling coverage||J.D. Power score||AM Best Rating|
|New Jersey Manufacturers||4.6||$373||Not rated||A+|
*Not officially ranked with J.D. Power due to eligibility restrictions
While some other insurance companies take a low-touch approach to customers, Allstate operates local agencies throughout New Jersey. Allstate also makes the claims process easy, giving you the option to call their nationwide claims center, contact your local agent or file from your smartphone using the Allstate mobile app. Allstate offers a wide range of discounts, which could dramatically decrease your premiums. You could earn discounts by setting up an automatic payment system, going claims-free, installing smoke or theft alarms in your home and even up to a 10% welcome discount just for switching to the homeowners insurance company from another insurer. However, Allstate’s premiums are the highest on our list, so it may not be the best choice for budget-conscious shoppers.
Learn more: Allstate Insurance review
New Jersey Manufacturers
New Jersey Manufacturers (NJM) is a regional insurer that offers several discount options, including one for seniors and others for installing storm shutters and hurricane-resistant glass. These discounts may be attractive to New Jersey residents who experience storms and hurricanes sweeping in from the Atlantic Ocean. You can personalize your homeowners insurance policy by adding endorsements, or riders, for identity fraud, mold and rot and increased personal property coverage for expensive items such as furs and jewelry. However, NJM is not rated by J.D. Power.
Learn more: NJM Insurance review
State Farm has an A++ (Superior) rating from AM Best, which means State Farm is one of the most historically financially stable homeowners insurance carriers in New Jersey. State Farm is also known for offering a wide range of home insurance coverage types and helpful online resources where you can learn more about what your homeowners insurance policy covers. However, the homeowners insurance company has the second-highest premiums on our list.
Learn more: State Farm insurance review
Travelers offers the second-lowest premium on our list. In addition to low average premiums, the company offers a wide range of discounts such as deals for green homes and being loss-free. Travelers offers additional coverage options such as coverage for jewelry and valuable items, identity fraud and a personal articles floater. However, before buying, you may want to consider that Travelers received the lowest J.D. Power customer satisfaction rating on our list.
Learn more: Travelers Insurance review
USAA provides comprehensive homeowners coverage with a list of discounts and coverage that is tailored to the needs of military members. While USAA is not eligible for official ranking due to its membership requirement, the company generally receives some of the highest scores out of the rated New Jersey home insurers, and it received one of the highest customer satisfaction scores in J.D. Power’s 2021 home insurance study. However, home insurance through USAA is only available to its members, and membership is limited to active military, veterans and their eligible family members, so access is limited.
Learn more: USAA Insurance review
How much is homeowners insurance in New Jersey?
The average premium cost for a homeowners insurance policy in New Jersey is $775 for $250,000 in dwelling coverage per year. This is significantly lower than the national average of $1,393, making New Jersey one of the most affordable states for homeowners insurance. There are likely a few reasons that the average cost of home insurance is so low in this state. For example, New Jersey has a lower cost of living compared to nearby states, which likely contributed to the lower cost of insurance. New Jersey’s average home insurance rates are especially affordable compared to the neighboring state of New York, which has an average home insurance cost of $1,289 per year for $250,000 in dwelling coverage. New Jersey’s average home insurance costs are also cheaper than Delaware, but the state is about on par with the average cost of home insurance in Pennsylvania, which is $786 annually for the same coverage.
Home insurance in New Jersey
With severe weather impacts year-round, a well-rounded New Jersey homeowners insurance policy could make a significant difference. In the summer, the potential of strong hurricanes can negatively impact insurance premiums, particularly in Jersey Shore communities. In the winter, nor’easters and other severe storms due to catastrophic winds and the heavy weight of snow and ice buildup can cause property damage to the roofs of homes. Tornadoes are also prevalent in New Jersey in the spring, summer and fall.
Common causes of loss in New Jersey
Common property losses that are typically seen with home insurance claims in New Jersey include:
- Storms and hurricanes: As a coastal state that is in the direct line of impact of any hurricane moving up the east coast, home insurance losses due to wind and water damage are common. New Jersey residents can use FEMA’s Flood Map Service Center to find out if they live on a flood plain and if they might either need or want flood insurance. If you need assistance preparing for a hurricane, you may want to consult a disaster preparedness guide to make sure you’re stocking up on necessary goods or evacuating in time.
- Wildfires: Wildfires can impact those who live in more rural or heavily wooded areas of the Garden State. An average of 1,500 wildfires a year damage forests and the homes that are near them. This is especially true for those in the northern part of the state or the region of the Pine Barrens, where fires can spread quickly because of dry underbrush.
- Snow: New Jersey is snowier than 26 other states in the country, according to the World Population Review. Snow can cause water damage, flooded basements and more.
- High winds: New Jersey sometimes experiences high-wind events, which can cause power outages and other issues. Protecting yourself financially against potential windstorms may be smart.
Fortunately, New Jersey is not a high-risk state for earthquakes, although small tremblers occur occasionally. The most severe earthquake ever recorded in the state was a 4.8 quake in 1938. New Jersey is also far from “Tornado Alley” in the Midwest, but occasionally experiences tornado outbreaks, including in July 2021 in areas near the Delaware River.
Home insurance coverage options in New Jersey
As a coastal state, New Jersey sits perched on the Atlantic Ocean, leaving it vulnerable to specific risks.
- Flooding: New Jersey has nearly 500,000 properties that have a 26% chance of experiencing extreme flooding within the next 30 years, according to non-profit foundation Flood Factor. If you’re a homeowner in New Jersey, you may want to check if flood insurance is required in your home’s area. Flooding is not standard on a homeowner’s policy, so it may be worth considering whether or not it’s required.
- Sewage backup: According to New Jersey’s Department of Environmental Protection, excessive rain or snowmelt can overwhelm the capacity of sewer pipes and result in an overflow of untreated sewage and stormwater. You may want to consider sewage backup coverage to ensure you’re financially prepared in the event of standing water or sewage backup in your home.
- Identity theft: The highest portion of reports filed to the Federal Trade Commission in 2020 were for identity theft. With financial crime through identity theft on the rise, some homeowners may want to add on identity theft coverage to their homeowners insurance policy.
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