The 5 Best New Jersey Homeowners Insurance Companies
New Jersey’s average annual premiums for homeowners insurance are right in line with the national average — $1,092 per year for an HO-3 policy, compared to $1,132 nationwide. That said, how much you’ll pay can vary a lot depending on your home’s size, your assets, and your address. Use our tool to find your best rates:
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The tragedy of Hurricane Sandy in 2012 laid bare the importance of proper homeowners insurance coverage. It caused about $30 billion of damage in New Jersey alone, and nearly 350,000 homes were damaged or destroyed. It’s also had a major ripple effect on the insurance industry; one company we talked to said it had only just recently re-entered the New Jersey market.
According to the Insurance Information Institute, as of 2012 about 34 percent of homes in New Jersey are on the coast and vulnerable to hurricanes, with a total value of about $713 billion. Not content to assume all that risk, most home insurance companies include “hurricane duration” deductibles in their policies. These deductibles can get expensive in the event of a disaster — the homeowner typically pays 5 percent of their home’s value out of pocket before the insurance company ponies up any cash.
Even so, the average premium price for a homeowners policy in New Jersey is $1,092 — while premiums have risen steadily over the years due to inclement weather, New Jersey’s rates are still slightly lower than the national average for an annual premium ($1,132). But these numbers will vary considerably depending on where you live, the price of your home, and how old your home is. Check out our quote tool to get an idea of premium prices in your area.
How We Found the Best Homeowners Insurance in New Jersey
Using our review on nationwide homeowners insurance providers as a guide, we evaluated the top five New Jersey providers by market share. We pored over their coverage options and discounts, and then picked a home and solicited the companies for quotes online and by phone, taking notes on the smoothness of the process and the helpfulness of their agents. We clicked around their websites and analyzed their educational materials and site tools to ensure we’d feel comfortable using them in the event of a claim. To ensure they’re in solid financial standing, we reviewed each company’s credit from the major raters (Moody’s, S&P, and A.M. Best). Finally, we compared each company’s claims and customer experience process side by side with data from Consumer Reports and J.D. Power and Associates.
New Jersey Homeowners Insurance Reviews
We like State Farm’s easily customizable pricing and solid reputation. Along with Chubb, State Farm had the highest financial stability of any company we looked at (AA from S&P Global—”very strong capacity to meet its financial commitments” — and an A++ from A.M. Best, the second-best possible rating). Consumer Reports readers gave State Farm an 82 score for overall satisfaction, which beat out Liberty Mutual (80) and Allstate (77). When it comes to the claims part of customer satisfaction, J.D. Power rated State Farm as “better than most,” while Consumer Reports readers said State Farm was a 50 (average); however, Consumer Reports readers didn’t have too many complaints about being paid on time, rating State Farm as “better than most” for that aspect. In an all-up composite score of ratings, State Farm has a slight edge over Liberty Mutual and Allstate.
State Farm particularly shines in its online experience. It’s very easy to get a quote — plug in your information and you’ll get a detailed price with customizable components. We put in a quote on a $280,000 home that came with an initial estimate of $854 annually, or about $71 per month at a 1 percent deductible for total damages ($1,000 minimum). However, you can easily adjust your deductible amount in a drop-down box, which will affect your annual premium. For example, if we were to agree to pay a 4 percent deductible, our annual premium would go down to $668 per year.
In addition to your standard deductible, you’ll be on the hook for a hurricane duration deductible of either 2 or 5 percent. It must be higher than your standard deductible; for example, if you decide to pay a 4 percent standard deductible, you must have a 5 percent hurricane duration deductible. Hurricane deductibles are a necessary evil, but State Farm was the only company we encountered that let you choose between a 2 percent or 5 percent option; we liked that homeowners got to have a say in their rates.
If we were to bundle our original policy with car insurance, our premium would get knocked down to $47 per month, or $494 per year. That is a pretty hefty discount; to compare, with the same auto-home bundling discount, Liberty Mutual quoted us at $1,694 for essentially the same coverage and less wiggle room to customize our quote.
According to a Liberty Mutual agent we talked to, the company has just recently re-entered the homeowners insurance market in New Jersey after Hurricane Sandy. We could sense its careful re-entry to the market: Liberty Mutual has an online quoting system for homeowners insurance, but it wouldn’t allow us to use it. It instead directed us to call an agent. We found nearly every New Jersey ZIP code we entered would direct us to an agent, while virtually any out-of-state ZIP code did not.
When we finally got a quote over the phone, we weren’t impressed with Liberty Mutual’s rates or coverage options. It quoted us at $1,992 annually (yikes!), with a rigid 5 percent hurricane deductible. For the same home, Allstate quoted us at $1,109 for its elite option, offering almost the exact same coverage. The agent said the $1,992 figure could get knocked down by $300 if we bundled our auto insurance with Liberty Mutual, but that didn’t at all make up for the pricey coverage.
We did like that Liberty offered us 20 percent extended replacement coverage, which meant that our $280,000 sample home would have coverage up to $348,720. This is important for old homes, whose replacement costs may exceed their actual value. But other carriers were just as generous.
The agent was friendly, but we were a little frustrated with the online shopping experience, which was less seamless than Allstate and State Farm. When we told the agent about the goofy online quoting system, he said that the company was still “trying to sort out some glitches.”
The agent gave us an interesting bit of information on roofs, which he said are the single-most important part of getting an accurate quote on a home. Once a roof gets to 15 years or older, “Companies will start to shake you down for rates,” the agent said, and sometimes Liberty Mutual won’t cover roofs of that age.
Liberty Mutual has solid financials (A2 from Moody’s), but it was outshined by Allstate (A3) and Chubb (A3). We like the company’s online resources, but they paled in comparison to the tools and calculators offered by State Farm, NJM (New Jersey Manufacturers Insurance Company), and Allstate. In all, we don’t think Liberty Mutual is a great option for New Jersey homeowners until the company gets more comfortable in the market.
In our review of the best national homeowners insurance providers, we called out Allstate as a great provider for first-time homeowners. Its website is sharp, with countless resources and calculators, and coverage options are vast and customizable.
After its online quoting process, we received a quote with many discounts already applied. Allstate, like many home insurers, offers customers a discount if they bundle their home and auto insurance (also known as “multi-policy”). Interestingly, our quote came with this auto-home bundling discount already applied, though we didn’t indicate any interest in bundling a car with home insurance. In all, Allstate says that bundling can save you up to 25 percent off your auto insurance and 35 percent off your home insurance, good for up to 30 percent off your total annual premium.
Allstate had three coverage plan options: the lowest, or Standard plan, quoted us at $564 per year, which is far cheaper than any other quotes we received. Meanwhile, the Choice plan cost $726 per year, and the most expensive coverage was for $1,109 per year. Of the three price quotes we received, Allstate was the only one to offer us three separate options; it was far cheaper than Liberty Mutual ($1,992 flat) and its Choice plan was a tick below the initial State Farm offer ($854). Keep in mind, though: These are just sample quotes, and that our quoted rate will likely differ from yours.
Typical of Allstate, there were many discounts applied to our rate, including some for auto-home insurance bundling, smoke-free home, claims-free, early signing, autopay, and welcome. By our count, Allstate’s discounts available (11) were the best of the bunch, besting State Farm and NJM (six each). Liberty Mutual typically offers many discounts in other states, but in New Jersey it was reluctant to give us more than auto-home bundling.
Each plan for Allstate had deductibles for all-peril, windstorm/hail, and hurricanes. Per usual, the more you pay on your annual premium, the less you pay in your deductible. The main difference: The cheaper Standard plan has a $2,000 all-peril deductible, while the Elite and choice all-peril deductibles costs $1,000 each. For all three options, the hurricane duration deductible is 5 percent of your total Dwelling protection. We were more impressed with State Farm in this instance, which lets you choose a hurricane deductible of either 2 or 5 percent. And we were surprised that Allstate’s Elite option doesn’t at least offer a smaller hurricane duration deductible.
Despite its appealing prices and customer service, there’s another knock on Allstate: its claims experience. It rated lowest compared to all four major competitors.
Allstate’s rates are appealing, but don’t be too charmed by them, as you’ll miss out on some key coverages and end up paying high deductibles should you ever make a claim.
Chubb’s “Masterpiece” policy demonstrates the company’s focus: high-end clients and homes, especially collectors. It includes optional scheduled coverages for “Fine Arts Breakage” and “Newly Acquired Furs, Cameras, Music Instruments, and Collectibles (up to 25 percent of the itemized amount).” Says a pamphlet: “We are a world-leading insurer of fine homes and cars, as well as privately owned art, antiques, and jewelry. There are over 1 million Masterpiece policyholders around the world.”
The optional Family Protection Policy, which Chubb touts was the only of its kind, offers protection for kidnappings and ransom, stalking, and incidents of “Air Rage or Road Rage.” In April 2016, Chubb grabbed headlines when it became the first major insurer to include “cyberbullying insurance” to its homeowner policy. Chubb will pay more than $60,000 in damages “when cyberbullying results in a victim’s wrongful firing, false arrest, wrongful discipline at school, mental anguish, or mental injury. It even will cover public relations services to help fix a damaged reputation,” says the North Jersey Record.
If all this sounds like your cup of tea, Chubb has the financial reputation to back it up. It has some of the highest average credit ratings of any company we evaluated (A++ from A.M. Best, A3 from Moody’s). According to J.D. Power’s 2015 survey of home insurers, Chubb’s claims experience was rated “better than most.”
Chubb gives discounts for bundling your auto and home insurance, but its website offers scant information on any other price cuts, and any pricing in general. For a company with such high-end aspirations, we expected to find more details on its website about policies. You can’t get price quotes online from Chubb, either. Check with an affiliated independent agent to see if your home is eligible for Chubb Insurance.
The first thing to know about NJM: It has eligibility restrictions and is membership-only. However, it casts a wide net — generally it’s available to public and government employees and their spouses and to anyone working for a company in the New Jersey Business and Industry Association. Check out its full list of eligibility requirements here.
If you can get in, NJM is a solid option for homeowners. There are a few interesting perks that NJM offers that its competitors don’t. Foremost is its dividend program: at the end of each year, homeowner policyholders are “typically credited” with a “regular dividend of 5 percent,” which goes toward paying their annual premium. That loyalty program is just on top of some generous discounts: anywhere from 1 percent to 31 percent for new home buyers, 13 percent for having automatic sprinklers, 15 percent for auto / home insurance bundling, and 5 percent for fire and burglar alarms connected to police and fire stations. There are discounts to be had in its Home Analysis program, too — if you let an appraiser inspect your home and insure it to your full replacement cost, you’ll get up to a 13 percent discount. NJM’s amount of advertised discounts (seven) was less than we saw from Liberty Mutual (12) and Allstate (11), but the percentages were considerable, and on top of the dividend program, it could really pay out if you can mix-and-match.
We were pleased with NJM’s simple, informative website. We always felt like an answer to a question was right around the corner. We learned about hurricane deductibles, how to stormproof our homes, and how to shop for homeowners insurance in its downloadable buyers’ guide, which clears up a lot of industry jargon.
NJM’s optional coverages and endorsements are among the most varied of the five we tested. Boaters will be pleased to see the company’s optional coverage for watercraft through a partnership with American Modern Insurance, including coverage for cruiser boats, jet skis, and pontoons.
Most flood policies are only available separate from a homeowners policy, through FEMA. NJM is one of a handful of private companies offering flood insurance. It still must be purchased separately from a home policy through its subsidiary company, New Jersey Re-Insurance, but we liked the convenience of using one website to manage flood and homeowners insurance rather than jumping over to FEMA. Next to State Farm, NJM was the only company to offer an optional coverage for mandated building code upgrades.
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Did You Know?
Rates have been steadily rising — but they haven’t skyrocketed.
In 2009, New Jersey insurance companies had it fairly easy relative to other states: They paid an average claim of $354 per house, according to the nonprofit Insurance Research Council. That changed drastically starting with Hurricane Irene in 2010, and got worse with Hurricane Sandy in 2012, where the average claim per home shot up to $722. The next year, however, the average claim was already down per home, and the average number of claims per hundred homes dropped, indicating that things have returned to normalcy for the time being. (And as we indicated above, in 2014, the average homeowners insurance premium in New Jersey was $1,092, which was still below the national average of $1,132.)
Average claim amount per home
Number of claims paid per 100 homes
Source: Insurance Research Council
So despite Sandy’s effects, New Jersey’s home insurance market has managed to stabilize and maintain. Why did it rebound so fast?
New Jersey insurance officials say the state has high home values ($273,600 median, according to Bankrate, higher than the national average of $240,000). This draws many insurers to the state looking for business, and the competition keeps costs down. This underscores the importance of shopping around for the right insurer and keeping in touch with your agent or broker. There are more than 100 companies offering homeowners policies in the state, and as your house and lifestyle change, you may be eligible for better coverage or discounts.
Hurricanes are a standard part of all New Jersey homeowners insurance.
After Hurricane Andrew hit in 1992, insurance companies wanted to find a way to lessen their risk and payout when tropical storms hit, says the Insurance Information Institute (III). Unfortunately, companies passed off these expenses to the customer in the form of hurricane duration deductibles, which are now standard in hurricane-prone states such as New Jersey.
It’s important to note that hurricane duration deductibles exist separate from standard “all-peril” deductions. In the event of hurricane damage, you’ll pay a deductible ranging from 1 to 5 percent of your home’s total quoted replacement cost — for example, if your home is valued by the insurance company at $250,000 and you have a 5 percent hurricane deductible (a common figure among companies we tested), you’ll pay $12,500 out of pocket before any work is done.
So what is a hurricane, and what could be constituted as hurricane damage, and when do hurricane deductibles apply? That varies by company. However, it generally starts with the National Weather Service. Often, if the NWS determines that 74 mph winds have hit somewhere in the state, that is enough evidence for companies to trigger hurricane deductibles. The trigger also may depend on the intensity of the hurricane on a scale from 1 to 5, with 5 being the most intense.
Note to coastal homeowners: Some companies may reduce your premiums if you make an effort to stormproof your house, such as buying stronger roofing materials and adding storm shutters. Allstate and State Farm, for example, often offer discounts for roofs that have been certified as stormproof. It’s worth asking your current or future insurer if it offers such discounts.
But flood insurance is not — and that’s a surprise to many homeowners.
Hurricane Sandy exposed a common misconception of homeowners insurance plans: Flood insurance is not included in most policies. You must buy it separately from your homeowners policy from FEMA, or from a handful of private insurers. “A large number of homeowners in the affected areas did not carry flood insurance,” says Brady Mason, a content manager for Safeco and a consultant tracking trends in the insurance industry.
In addition to the inconvenience of having a separate insurance policy, many homeowners affected by Hurricane Sandy believe they were “shortchanged” by flood insurers in the claims process. According to reports: “At least three former employees of a FEMA subcontractor reviewing the claims said in affidavits that they were told to use a formula based on a structure’s square footage and its construction to decide how much money a homeowner was entitled to, not review actual damage reports.”
For its part, FEMA has promised to overhaul the flood insurance program, pledging to take control of the appeals process where Sandy homeowners were forced to combat their flood insurers. Those insurers, after being sued for denying claims or underpaying, are charged with freely using government money to fight customers in this appeals process. In response, FEMA also agreed to re-open the claims process for more than 140,000 New Jersey homeowners who suffered losses during Sandy.
In 2015, 130 providers were hit with fines totaling almost $4.5 million for unjust practices — the highest amount in the nation, according to a report by the National Association of Insurance Commissioners. 60 Minutes exposed how in the aftermath, “Many homeowners were victims of what appears to be wide-scale fraud where original damage reports were later changed to make it look like the damage wasn’t as bad.”
The underpayments and shady dealings show how insurers don’t always have their customers’ best interests at heart, especially after a catastrophic event, where the insurers must pay out thousands of claims. And despite the exposure of wrongdoing, consumers have a reason to hope that FEMA will be more prepared in the event of another disaster. However, the scrambling of insurers should be a wake-up call to homeowners to be prepared themselves before a storm, too. “Homeowners should document videos and photos of their home and possessions before a loss and keep it in a safe place outside their home,” Mason says. Also, in the event of a loss, “it will prove to be a better outcome when the homeowner has some understanding of their coverage.”
The Bottom Line
Of the five largest providers in the New Jersey we like State Farm for its easily customizable pricing on hurricane deductibles and wide coverage options. NJM is a great option for government and public employees and their families for its unique dividend program, though it’s membership only. If you’re insuring a high-end home, Chubb is a good option for its unique coverages of fine arts and collectibles and strong financial backing.
Of course, your needs will differ depending on the age of your home, location, and many more factors. Use our quote tool to get a sense of the best pricing and coverage options in your area.
Find the best homeowners insurance in your area.
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