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New Jersey (NJ) Homeowners Insurance

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Homeowners Insurance NJ

Here we outline what you need to know to make smart choices when buying homeowners insurance in New Jersey. We rank the best homeowners insurance companies in New Jersey, identify cheap homeowners insurance companies in New Jersey for six coverage levels and provide expert recommendations on how much coverage you need.

No matter where you live, it pays to compare rates for homeowners insurance. The same is true for New Jersey. Premiums can vary, sometimes by a little, sometimes by a good amount more.

Why is that? Michael Barry, a spokesman for the Insurance Information Institute, a trade group, explains that various factors influence home insurance rates. They can include building costs in your area, local crime rates, and the risk where you live from natural disasters such as hurricanes, hail storms and tornadoes. And, of course, insurance companies want your business and that may affect pricing.

Here we will provide information on:

  • Homeowners insurance: New Jersey average cost
  • How deductibles affect your insurance rate
  • New Jersey homeowners insurance comparison: Rates for 10 coverage levels
  • New Jersey home insurance comparison by ZIP code
  • New Jersey home insurance rates by company
  • Best New Jersey home insurance companies
  • New Jersey home insurance discounts
  • Other types of home insurance you may need in New Jersey
  • Methodology

How much is home insurance in NJ?

The average cost of home insurance in New Jersey is $1,744, making New Jersey the 14th least expensive state in the country for home insurance. Its average cost is $561, or 24%, less than the national average of $2,305, for the coverage level of:

  • $300,000 dwelling coverage
  • $1,000 deductible
  • $300,000 liability

Cheapest homeowners insurance: NJ

Based on our rate analysis, you’ll see Travelers was the cheapest home insurance company, among carriers surveyed. Safeco, Allstate, Allied, USAA and Nationwide also had cheap insurance rates for New Jersey homeowners, compared to the other companies. Here are home insurance rates by company for dwelling and liability coverage of $300,000, with a $1,000 deductible.

Company NameAverage annual rate
Travelers$1,953
Safeco$2,037
Allstate$2,239
Allied$2,370
USAA$2,524
Nationwide$2,699
New Jersey Farm Bureau$2,811
State Farm Fire$3,029
Nationwide$3,134
LM Insurance$3,608
Foremost$4,139

Because costs are not uniform, it's crucial to shop around for the best home insurance rate.

Many factors influence the price you pay for insurance. Among others, the Insurance Information Institute (III) cites the following:

  • Your home's square footage
  • Building costs in your area, and your own home's construction, materials and features
  • Local crime rates
  • The likelihood of certain types of disasters, such as hurricanes

So, shop around for the right policy. Senior Consumer Analyst Penny Gusner suggests getting at least three price quotes when shopping for coverage, and says that doing so can save you up to hundreds of dollars annually.

Although New Jersey home insurance costs can be expensive, it's a mistake to cut corners in an attempt to save. Gusner recommends that you get enough insurance to cover the costs to:

  • Repair or replace the structure of your home and personal possessions
  • Defend yourself against liability costs if someone is hurt on your property
  • Pay for a temporary place to live while your home is repaired or replaced

New Jersey homeowners insurance by ZIP code

By entering your ZIP code in the search box and desired coverage level, you’ll see the average home insurance rate for that area. You will also see the highest and lowest premium fielded from major insurers. This will give you an idea of how much you can save by comparing home insurance rates. The difference between the highest the highest rate and the lowest rate is how much you can save by shopping your policy.

Homeowners insurance quotes for NJ: Rates for 10 coverage levels

Here we show the average cost of New Jersey homeowners insurance for 10 coverage levels, based on a rate analysis by Insurance.com. 

Enter a dwelling coverage of $200,000, $300,000, $400,000, $500,000 or $600,000. You will see annual average rates based on a $1,000 deductible for each liability limit of $100,000, $300,000.

CoverageAverage annual rate
$200,000 dwelling/$100,000 liability$1,301
$200,000 dwelling/$300,000 liability$1,327
$300,000 dwelling/$100,000 liability$1,717
$300,000 dwelling/$300,000 liability$1,744
$400,000 dwelling/$100,000 liability$2,146
$400,000 dwelling/$300,000 liability$2,174
$500,000 dwelling/$100,000 liability$2,573
$500,000 dwelling/$300,000 liability$2,602
$600,000 dwelling/$100,000 liability$2,878
$600,000 dwelling/$300,000 liability$2,907

How much is home insurance in NJ cities?

Let’s explore average rates for some of the state's largest and well-known cities, for a policy with $300,000 dwelling and liability coverage, with $1,000 deductible. You’ll see homeowners insurance in Clifton, Hoboken and Passaic is much more affordable than other metro areas. Homeowners insurance in Asbury Park, Newark and Jersey city are more expensive.

CityAverage rate$ from state average of $1,744
Clifton$1,604$140 less
Hoboken$1,657$87 less
Passaic$1,681$63 less
Elizabeth$1,688$56 less
Trenton$1,764$20 more
Paterson$1,778$44 more
Camden$1,894$150 more
Jersey City$1,898$154 more
Newark$1,980$236 more
Asbury Park$2,102$358 more

What is the best homeowners insurance in NJ?

The homeowners insurance company with the cheapest rates isn’t necessarily the best. Other factors to consider are customer service and claims processing. Insure.com’s 2020 Best Home Insurance Companies report ranks major insurers on feedback from 3,700 customers. They are asked about the value for the price, customer service, claims service and if they’d recommend the company.

Here is how the best home insurance companies in New Jersey ranked on the survey. Scores are out of 100. 

Best home insurance companies in NJ

Chubb, Esurance, USAA, State Farm, Travelers, Erie, Nationwide, Allstate, Safeco and Progressive are the top 10 best carriers for home insurance, based on customers’ feedback on our survey.

RankingCompany 
1Chubb (ACE INA Group / Ace Limited)94.533
2Esurance93.067
3USAA89.844
4State Farm87.743
5Travelers86.382
6Erie86.016
7Nationwide85.187
8Allstate84.756
9Safeco84.214
10Progressive82.714
11Hartford82.272
12AIG (American International Group)82.021
13Liberty Mutual80.663
14Farmers76.571

Homeowners insurance NJ explained and How much coverage to buy

Among key things to consider when buying a homeowner insurance policy, you decide the coverage amount for the following:

  • dwelling
  • liability
  • medical payments

The limits of your coverage for the following are typically a set percentage of your dwelling coverage limit as shown below:

  • other structures – 10%
  • personal property – 50%
  • loss of use – 20%

Our list of tips for buying home insurance starts with knowing the difference between replacement cost and market value, and why it’s important in terms of coverage. When buying home insurance, you should insure your home based on its replacement cost, which is the amount you need to rebuild it if damaged or destroyed, and not its market value, which is what you could sell your home for in its current condition. Replacement cost offers more protection because the cost of building a home often exceeds its market value.

When shopping for a policy, you should be aware of the basics of home insurance, which begins by choosing a “dwelling coverage” amount. You should select a dwelling coverage limit that best matches the cost to repair damage to your home or rebuild it completely at equal quality — at current prices. This can be an arduous task, so using online calculators or hiring an appraiser to give you a replacement cost valuation will save you time.

Liability insurance applies to incidents in which you’re at fault and the result is that a guest in your home or on your property is injured. It covers medical expenses, as well as damage caused to neighbors’ property. Personal liability also covers legal fees if you are sued, as well as any resulting judgments from a lawsuit, up to your policy limits.

Most home insurance policies come with $100,000 in personal liability insurance but this is rarely enough coverage. The cost to defend a lawsuit or to pay for medical expenses for a serious injury can easily exceed that amount. Most experts recommend upping your limits to at least $300,000.

Medical payments also pays for injuries to guests in your home but differs from liability in that it applies to injuries regardless of who is at fault. It is for minor incidents as it comes with much lower coverage limits than liability insurance. Medical payments coverage is typically for $1,000 or $5,000.

You also choose a deductible, which applies to your dwelling coverage.

How deductibles affect your insurance rate

A deductible is the amount of money you pay before your insurance company pays out on a claim. For example, if your home sustains damage of $3,000 and you have a $500 deductible, you pay the first $500 and your insurer pays $2,500.

Some deductibles are based on dollar amounts. Others are based on a percentage of your home's value. If your home is insured for $200,000 and your deductible is 2%, you will owe $4,000 before insurance coverage kicks in.

You  choose a home insurance deductible amount, which applies to claims for damage to your home or belongings, but not if you’re sued or a medical claim is filed by someone injured in your home. These are typically in the amounts of $500, $1,000, $1,500, $2,000 and $2,500.

Understanding the implications of the deductible you choose when buying homeowners insurance is important. In New Jersey, as in all the states, a higher deductible means you'll save on insurance premiums.

The savings can be significant. Barry says that most insurers recommend a deductible of at least $500, which may be ok for you. But keep in mind that by raising that to $1,000, you're likely to save as much as 25% on your policy, according to the III. Of course, that's $1,000 out of your pocket if there are major problems, so it's a bit of a balancing act.

NJ Homeowners Insurance Discounts

There are several ways to reduce your New Jersey home insurance costs. Many insurers will lower your bill if you purchase more than one type of insurance policy from them. This process – known as "bundling" – can cut your costs by up to 19%, on average, according to Insurance.com’s discount data analysis.

You can also cut your costs by making your home more disaster-resistant. Installing hurricane glass or accordion shutters might net you a discount.

Other possible home insurance discounts include:

  • Installing smoke detectors, a burglar alarm or dead-bolt locks -- 5% each
  • Installing a sprinkler system, and a fire and burglar alarm -- 15% to 20% percent
  • Loyalty discounts – about 4%  on average, after three to five years, and  6% for six years or more

New Jersey home insurance FAQs

How do I find the right insurance company?

Comparing insurance quotes is among the best ways to find the right homeowners insurance coverage at the best rates. Getting quotes from at least three companies can help you save up to hundreds of dollars in annual insurance costs, according to the Insurance Information Institute.

The New Jersey Department of Banking and Insurance has a web page that lists insurance companies that offer homeowners insurance policies in the state. At this page, you'll find contact information for insurers that sell:

  • Homeowners insurance
  • Renters insurance
  • Mobile home insurance
  • Private flood insurance

Homeowners insurance can be a complicated and confusing subject. In 2015, New Jersey began requiring all insurers to provide a one-page summary detailing each insurance policy's terms, coverages and exclusions. You can find model examples of these summaries at the Department of Banking and Insurance website that explain:

  • Common coverages
  • General policy features
  • Notable coverages and exclusions by type of loss

It's important to note that these are general summaries. Individual insurers might offer summaries with important differences from the summaries you'll find on the Department of Banking and Insurance website.

Why do I need flood insurance?

Floods are a big and devastating possibility in New Jersey. The state ranks third among those most at risk for flooding damages related to hurricane storm surges. More than 350,000 homes are in harm's way in the Garden State, and the potential exists for more than $118 billion in damage, according to CoreLogic.

Flood insurance coverage mostly is available through the National Flood Insurance Program. Nationwide, the average policy costs $400 annually, according to III. An NFIP policy provides coverage of up to $250,000 for the structure of the home, and up to $100,000 for personal possessions. 

New Jersey had nearly 231,000 flood insurance policies in force as of the end of January 2017. But that still leaves a lot of homeowners who forsake flood insurance and put themselves at great risk.  

Failing to buy flood insurance in New Jersey can be a disastrous mistake. Homeowners insurance does not cover damages related to flooding, and floods occur more often than any other natural disaster in the U.S., according to III.

Repairing flood damage can be extremely costly. The average flood insurance claim associated with Superstorm Sandy in 2012 topped $60,000, according to III.

What if I can't find flood insurance?

If you live near the coast – or if you own a home that is especially large or expensive to repair – your flood insurance needs might exceed coverage limits set by NFIP. In addition, some communities do not participate in NFIP, leaving private insurer flood insurance as the only option for homeowners in those areas.

The New Jersey Department of Banking and Insurance website has a list of a half-dozen insurers that sell private coverage in the state.

What is windstorm insurance?

For many years, New Jersey residents did not worry much about damage caused by storm winds. Superstorm Sandy changed all that. The storm was the third costliest in U.S. history, behind only Hurricane Katrina and Hurricane Andrew.

Wind insurance protects you from most damages -- aside from flooding -- caused by storms such as hurricanes. Depending on where you live in New Jersey, your homeowners insurance policy might have two specific types of deductibles related to windstorm coverage:

  • Hurricane deductible. This applies to damages that occur as the result of a hurricane, according to III. Nineteen states have hurricane deductibles, and New Jersey is among them.
  • Windstorm deductible. This applies to damages from other types of windstorms. It also might include coverage that protects you against hail damage.

New Jersey regulations state that hurricane deductibles kick in when a storm meets two requirements:

  • The National Weather Service designates a storm as a hurricane
  • Wind speeds reach 74 mph somewhere in the state

For damages to fall under a hurricane deductible, they must occur within a window that begins 12 hours prior to the first recorded instance of winds at 74 mph and ends 12 hours after the last recorded instance of 74 mph winds.

Today, two types of insurance deductibles dominate the insurance market. The first is a traditional fixed-dollar deductible. For example, if your deductible is $500, you are obligated to pay $500 out of pocket to cover repairs before your insurance coverage kicks in.

In recent years, a second type of deductible has emerged, and it has become increasingly common, especially for hurricane coverage. Known as a "percentage deductible," it requires you to pay a much larger amount out of pocket before your insurance coverage kicks in.

For instance, if your home is insured for $200,000 and your hurricane percentage deductible is 2 percent, you would be on the hook for $4,000 before your insurance coverage would kick in.

Some deductibles are mandatory, meaning they are set by state rules and regulations, or by insurers. Typically, mandatory deductibles are found in higher-risk areas, such as near the coast.

Insurers are allowed to use mandatory hurricane deductibles of up to 5 percent in ZIP codes designated by New Jersey law. These deductibles also can apply in areas the Department of Banking and Insurance approves. 

Insurers also can offer optional hurricane deductibles, which typically apply in lower-risk areas. These may range up to 10 percent. Policyholders who choose this option will receive a premium credit.

Making your home more resistant to storm damage – such as by adding hurricane shutters – might lower or even eliminate your hurricane deductible. Ask your insurer for more information.

What if I can't find wind insurance?

In some cases, it might be difficult to obtain insurance coverage – including windstorm insurance. This is particularly true if you live in a high-risk area near the coast.

In such instances, the New Jersey Insurance Underwriting Association offers polices for one- to four-family homes. This is known as a FAIR Plan. Coverage is limited, but includes wind insurance.

If your home has certain wind-resistant features, you might be eligible for a reduction in the hurricane deductible associated with a FAIR Plan. Policyholders in New Jersey's 116 coastal area ZIP codes can apply for such a reduction by visiting the New Jersey Insurance Underwriting Association website.

For more information on FAIR Plans, see the next section.

What can I do if I can't get homeowners insurance in New Jersey?

For various reasons, you might find it difficult to get homeowners insurance from a private insurer. Perhaps you live in an area prone to flooding or vulnerable to other hazards. Or perhaps your home is would be extremely expensive to repair.

New Jersey allows some insurance companies – known as surplus lines insurers – to sell coverage for risks that other insurers will not cover. However, it's important to note that surplus lines insurers are not regulated to the same degree as standard insurance companies.

You can find out more about surplus lines insurers at the New Jersey Department of Banking and Insurance website.

If you cannot get homeowners insurance coverage from anybody, a policy might be available from the New Jersey Insurance Underwriting Association, known as the FAIR Plan.

These plans provide homeowners insurance basics, such as coverage for damage associated with fire, lightning, wind and smoke. However, you will not have theft or personal liability coverage, although the theft coverage is available if you are willing to pay extra for a policy endorsement.

It's important to note to that FAIR Plan coverage should only be viewed as an option of last resort if you can't get coverage elsewhere. For more information, check out the New Jersey Insurance Underwriting Association website.

Where do I get claims processing info or file a complaint?

You might end up disputing how your homeowners insurance company handled a claim. If you cannot resolve the matter to your satisfaction, consider contacting the New Jersey Department of Banking and Insurance. You can file a complaint by phone at 609-292-7272 or 800-446-7467. Or, file a complaint online.  

When filing a complaint, make sure to include:

  • Details about your problem
  • The name of your insurance company and/or agent
  • The policy number and claim number (where appropriate)
  • Any other relevant documents