The Best New Jersey Homeowners Insurance Company
New Jersey’s average annual premiums for homeowners insurance are right in line with the national average — $1,149 per year for an HO-3 policy, compared to $1,173 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's most recent evaluation, about 32 percent of homes in New Jersey are on the coast and vulnerable to hurricanes, with a total value of about $795 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 five 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 $1,149 — which is still slightly lower than the national average of $1,173. But these numbers will vary considerably depending on where you live, the price of your home, and how old it is. To find your best price, start by comparing premiums from our top five New Jersey home insurers.
How We Found the Best Homeowners Insurance in New Jersey
Using our national homeowners insurance review as a guide, we evaluated the top five New Jersey providers by market share. We pored over their coverage options and discounts, 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 with data from Consumer Reports and J.D. Power.
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 Allstate (80) and fell just short of Liberty Mutual (83). When it comes to the claims process, customers rate State Farm as “about average”; however, Consumer Reports readers confirm that they’re paid on time, rating State Farm as “better than most” for that. In an all-up comparison 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 quote with customizable components. We put in a quote on a $280,000 home that came with an initial estimate of $854 annually, at a one percent deductible for total damages ($1000 minimum). However, you can easily adjust your deductible amount in a drop-down box, which will affect your annual premium. For example, if we agreed to pay a four 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 two or five percent. This must be higher than your standard deductible; for example, if you decide to pay a four percent standard deductible, you must have a five percent hurricane duration deductible. Hurricane deductibles are a necessary evil, but State Farm was the only company we encountered that let you choose the amount; and we liked that homeowners got to have a say in their rates.
State Farm also offers decent multi-policy savings. If we were to bundle our original policy with car insurance, our premium would get knocked down to $494 per year. That’s a pretty hefty discount; by comparison, Liberty Mutual quoted us $1,694 for essentially the same coverage, with the same auto-home bundling discount, and less wiggle room to customize our quote.
In our review of the best national homeowners insurance providers, we called out Allstate as a great choice for first-time homeowners. Its website is sharp, with countless resources and calculators, and its coverage options are vast and customizable — not to mention, affordable.
When we requested a quote online, Allstate gave us three coverage plan options: The ‘Standard’ plan quoted us at $564 per year, which was our cheapest offer across the board. Meanwhile, the ‘Choice’ plan cost $726 per year, and the most expensive coverage rang in at $1,109. Of the three companies we contacted, Allstate was the only one to offer us multiple 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 you’ll have to request your own personalized prices to make a concrete comparison.
Part of the reason Allstate’s quotes are so low is that they come back with many discounts already applied. Allstate, like many home insurers, offers customers a discount for bundling home and auto 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. Interestingly, our quote came with this auto-home bundling discount already applied, though we didn’t indicate any interest in insuring a car through the company.
There were other discounts applied to our rate, too; including ones for a smoke-free home, claims-free, early signing, and autopays. By our count, Allstate has the most available discounts (12), besting State Farm and NJM (six each). Liberty Mutual typically offers up to 13 discounts in other states, but in New Jersey it was reluctant to give us more than auto-home bundling.
Allstate also carries slightly higher deductibles. Its 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 five percent of your total Dwelling protection. We were more impressed with State Farm in this arena, as it lets you choose a hurricane deductible of either two or five percent. Even Allstate’s most expensive ‘Elite’ option doesn’t offer customers that choice.
Ratings-wise, Allstate is pretty much on par with our other front runners, scoring “about average” in JD Power’s customer satisfaction survey, and a slightly lower 80 from Consumer reports. It has solid financial backing, with an A rating from A.M. Best and an A3 from Moody’s.
Overall: Allstate’s rates are appealing, but don’t be too charmed by them. You may miss out on some key coverages and end up paying much higher deductibles.
According to a Liberty Mutual agent we talked to, the company took a few years to re-enter the New Jersey market after Hurricane Sandy. We could sense its hesitancy: Liberty Mutual has an online quoting system for homeowners’ insurance, but it wouldn’t allow us to use it, instead directing us to call an agent. We found that almost any ZIP code we entered for quotes in New Jersey would direct us to an agent, while virtually any ZIP from other states 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 five percent hurricane deductible. For the same home and coverage, Allstate’s ‘Elite’ option cost only $1,109 — a full $800 less. Our agent mentioned that we could save $300 by bundling home and auto insurance, but that didn’t make up for the difference.
We do like Liberty Mutual's 20 percent extended replacement coverage. In the case of our $280,000 sample home, it meant we’d actually be covered for up to $348,720. This is important for old homes, whose replacement costs may exceed their actual value.
The Liberty Mutual agent was friendly, but the overall online shopping process was a little frustrating — we much preferred Allstate and State Farm’s seamless experience. When we brought up the goofy online quoting system, we were told that the company was still “trying to sort out some glitches.”
The agent did give us an interesting bit of information on roofs, which he said are the single-most important part of getting an accurate insurance quote. 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 strong financials (A2 from Moody’s), but it was outshined by Chubb and State Farm’s near-perfect financial scores. And we like its online resources, but they paled in comparison to the tools and calculators offered by State Farm, NJM, and Allstate. Overall Liberty Mutual is solid, but not the best option for New Jersey homeowners until it gets more comfortable in the market.
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 one million Masterpiece policyholders around the world.”
The optional Family Protection Policy, which Chubb touts as 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” on its homeowner policy. Chubb will pay up to $60,000 in cyberbullying damages to cover “psychiatric care, temporary relocation services, education expenses, public relations services and cyber security consulting,” according to Reuters.
If all this sounds like your cup of tea, Chubb has the financial reputation to back it up. It has some of the highest credit ratings of any company we evaluated (A++ from A.M. Best, A3 from Moody’s). And according to J.D. Power’s 2017 survey of home insurers, Chubb’s claims experience is pretty smooth.
Chubb also gives discounts for bundling your auto and home insurance, but its website is generally scant about pricing information and doesn't provide an online quote tool. For a company with such high-end aspirations, we expected a more streamlined and informative website. You'll have to check directly with an affiliated independent agent to see if your home is eligible for Chubb Insurance.
New Jersey Manufacturers
The first thing to know about NJM: It has eligibility restrictions and is membership-only. However, NJM 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 the full list of eligibility requirements to see if you qualify.
If you do, NJM is a great choice for homeowners. It even offers a few interesting perks that the competition doesn’t. Foremost is NJM’s dividend program — at the end of each year, homeowner policyholders are “typically credited” with a “regular dividend of five percent,” which goes toward paying their annual premium. This loyalty program is on top of generous discounts: anywhere from one percent to 31 percent for new home buyers, 13 percent for having automatic sprinklers, 15 percent for auto and home bundling, and five percent for fire and burglar alarms. NJM listed fewer overall discounts than Liberty Mutual and Allstate, but the percentages tend to be higher; along with its dividend program, you could save a chunk of change.
NJM’s coverage and endorsements are among the most varied of the five we looked at. For example, boaters will be pleased to see the company’s optional coverage for watercraft, which includes coverage for cruiser boats, jet skis, and pontoons through a partnership with American Modern Insurance. It’s also one of two companies to offer an optional coverage for mandated building code upgrades (along with State Farm).
In addition, NJM is one of a handful of private companies offering flood insurance. Most flood policies can only be purchased as a separate plan through FEMA. With NJM, they must still be purchased through a subsidiary company, New Jersey Re-Insurance, but we liked the convenience of using one website to manage both policies rather than jumping over to FEMA.
Finally, we were pleased with NJM’s simple, informative website. The company makes it quick and easy to find answers to just about any question. The downloadable NJM buyers’ guide is particularly effective: We learned about hurricane deductibles, how to storm-proof our homes, and how to shop for homeowners’ insurance without having to navigate a lot of industry jargon.
New Jersey Homeowners Insurance 101: What to know about your policy
It pays to shop around for homeowners insurance, and to review your policy annually.
Most states that are at-risk for natural disasters pay well above average for homeowners insurance: For example, Texas homeowners generally shell out around $2,000 per year, compared to the national mean of $1,173. New Jersey homeowners are fortunate to pay premiums that are right in line with the national average, around $1,149 annually — even though much of the state’s most valuable property resides in hurricane-prone areas.
So how is it that, despite Hurricane Sandy’s devastating effects, the New Jersey homeowners insurance market was able to rebound and stabilize so quickly?
According to Bankrate, New Jersey has high home value; around $282,300 median, higher than the national median of $255,000. 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 changes, you may be eligible for better coverage or discounts. Make sure to compare premiums from multiple companies before you buy, and to review your options annually to make sure you’re still getting the best deal for your home.
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 these expenses off to customers in the form of hurricane duration deductibles, which are now standard in at-risk states like 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 one to five 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 five percent hurricane deductible (a common figure among companies we tested), you’ll have to pay a $12,500 deductible out of pocket before any work is done.
These high deductibles beg the question: What can be classified 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 decision may also depend on the intensity of the hurricane on a scale from one to five, with five being the most intense.
Note to coastal homeowners: Some companies may reduce your premium if you make an effort to storm-proof 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.
Flood insurance is not standard; you may have to take extra measures to make sure you’re covered.
Hurricane Sandy exposed a common misconception of homeowners insurance plans: flood insurance is not included in most policies. You must buy it separately from the Federal Emergency Management Agency (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 consultant tracking trends in the insurance industry.
Among the homeowners that did have flood insurance during Hurricane Sandy, many attest that they were “short changed” by 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.”
In the face of underinsurance and shady dealings, New Jersey homeowners should take extra precautions towards flood insurance. First, make sure you’re covered: Talk to an insurance agent about you best options — whether through a federal program or a private company, like NJM’s subsidiary New Jersey Reinsurance. If you don’t have a policy picked out but still want to explore your flood insurance options, you can also contact the National Flood Insurance Program for an agent referral.
Second: Keep an updated home inventory at all times, to ensure fair compensation in the event that your home sustains flood damage. “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.” Some of our favorite insurers, like Allstate and Liberty Mutual, even include home inventory apps that make it easy to keep a current registry and photos of your possessions.