5 Things to Know About Homeowners Insurance in New Jersey

young couple holding the key outside of their new brick homeAre you getting ready to purchase a home in New Jersey? Are you wondering about homeowners insurance?

While it may add a little to your¬†monthly budget, homeowners insurance is critical to protecting your investment. You’ll want to do your research to make sure you’re making a smart decision.

Here’s what you need to know about homeowners insurance in New Jersey.

1. It’s Required

If you’re going to have a mortgage on your home, you’re required to have¬†homeowners insurance. Your lender will want to be certain you’re covered in case of a burglary or fire.

If you live in areas such as Ocean City, flood insurance may also be mandatory. This will be true if your building’s financing is federally guaranteed.

Your rates for flood insurance will depend upon how far above sea level your first floor is. Other factors influencing cost include your zone and the type of building you’re in.

2. There Are Different Coverage Types

While there are different homeowners insurance coverage types available, most basic plans will cover any financial loss caused by catastrophic events like fires and weather like lightning and hail. However, most won’t protect against flooding, earthquakes, or neglect.

The most basic type of homeowners’ insurance policy, and HO-1 policy, will provide coverage for the structure of your home. It won’t, however, cover your personal property or living expenses in the event of a catastrophe. It will cover damage in the event of fire, theft, vandalism, and a few other instances.

HO-2 policies will cover your personal belongings and damage caused by additional perils. These include frozen pipes, damaged home systems, and falling objects.

HO-3 policies are the most common. It will cover your home, personal property, medical payments, and living expenses in the event of a catastrophe. It also covers perils like foundational issues, defective construction, and pet damage.

HO-4 policies are for renters, and HO-6 policies are for condo owners. HO-7 policies cover mobile homes and HO-8 policies are for older homes that are difficult to replace. If you’re looking for a very high standard of homeowners coverage, you’ll want to go for an HO-5 policy.

3. Flood Insurance is an Add-On or Stand Alone

Some insurance companies may be able to offer your flood insurance as an add-on to a standard homeowner’s insurance policy. Others may offer it separately.

Generally, flood insurance covers any physical losses caused directly by the flood. It may cover your building and its systems as well as your contents. This could include clothing, electronics, and furniture.

4. Costs Depend Upon Your Coverage Type

The average cost for homeowners insurance per year in New Jersey is $1,744.

The actual cost of your insurance will depend upon several factors. These include your type of home, age of your home, and home remodeling. Personal factors that could influence your rates include your credit history and claim history.

Naturally, opting for additional coverage will cause your premiums to go up. You can, however, look for discounts or get a home security system in order to lower your rates. Improvements to your plumbing, electrical, or heating systems can also help.

5. Understand Policy Details

It’s important to have a general understanding of the details of your insurance policy.

You’ll notice information about the deductible, which is the amount you’ll pay initially for your insurance policy. Replacement costs are what it will cost to replace parts of your building or personal property, and your premium is what you’ll pay annually or monthly.

If you’re unclear of any details in your policy, make sure you ask your insurance representative. The best homeowners insurance companies in New Jersey have professionals on hand who are happy to explain anything you have questions about.

Finding The Right Policy

Before you purchase a homeowners insurance policy, make sure you do your homework. You can start by looking up local companies, as these outfits will be quite familiar with the house types and regulations in Ocean City, NJ.

Read online reviews and see what former clients are saying. Do they seem to be happy with their policy coverage? Were they able to get reimbursed quickly if they sustained weather-related damage?

You can also ask your new neighbors for recommendations, or request the names and numbers of references from local insurance companies.

Before you sign up for an insurance policy, you’ll want to get estimates from at least three different companies. The company with the lowest premiums isn’t always the best option for you. You’ll also want to be thinking about what will be covered and how much you’ll be paying should something catastrophic happen.

It’s also important to think about your deductible and the limits of different insurance policies. You’ll want to think about which limits will best suit your needs if there’s a fire or burglary.

If you’re going to purchase flood insurance, you should also carefully consider the cost as it relates to what will be covered if there really is an emergency. Whatever comparisons you make between policies should be true. This means you’re making a realistic assessment of the costs as they relate to the amount of coverage you’ll receive.

Homeowners Insurance in New Jersey

Purchasing homeowners insurance in New Jersey is an important decision that could end up saving you a tremendous amount of expense if something catastrophic were to happen. With the right understanding of policies and the types of coverage available, you can have the security of a quality insurance policy in no time.

Don’t stop getting smart about homeowners insurance now. For quality homeowners policies in New Jersey,¬†contact us¬†today.