If you’re buying a new home, you’d probably rather be shopping for paint colors and decor than for home insurance. But a robust homeowners insurance policy is your last — and best — line of defense in the event of a disaster.

The insurance industry is full of dense legal agreements and jargon, and can sometimes feel impossible to navigate. With a little guidance, you can get a good deal, pick out a policy that’s right for you, and rest easy knowing that you’re covered. Here at Freshome, we embarked on a mission to find the best insurance providers in New Jersey. We evaluated companies against a rigorous set of standards, including financial standing, transparency, affordability, and customer service.

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The Best Homeowners Insurance in New Jersey

Freshome’s Recommended Homeowners Insurance Companies in New Jersey: State FarmAmicaLiberty MutualTravelers InsuranceAllstateAmerican FamilyChubbGEICO

Getting multiple quotes for home insurance is the best way to ensure you’re getting a good deal. You can apply for a quote on most insurer’s websites. It only takes about 10 minutes and doesn’t impact your credit, so why not gather a bunch? The more quotes you have, the better your chances are of finding the perfect policy. We asked industry veterans for tips and the advice we heard most frequently matched up with this quote below.

“Get multiple quotes. Each carrier weighs risk differently, so there is no universal way to determine which insurance carrier is the cheapest. You have to run your whole situation by a few different carriers to see who offers the best rate based on what you’re trying to insure.” – Anonymous expert at YETInvesting.com

Once you have a number of quotes, take a look at price versus coverage and eliminate providers that are significantly more expensive than the rest. Take a closer look at any numbers that seem too good to be true — they might have a gap in coverage that could leave you vulnerable should disaster strike your home. Give the companies that make the cut a call on the phone to ask questions and refine your policy. And keep in mind the customer service you receive. If you’re put on a long hold for a sales call, imagine how you’ll be treated if you’re calling to recoup expenses.

We applied for a few sample quotes to show you the range of prices on the market. For these examples, we said we were moving into a small, one-bedroom, single-family home in Princeton, New Jersey. The home was valued just under $400,000 and was built within the last 20 years. We chose a deductible between $2,000 and $2,500, and said we’d take safety precautions like installing burglar and fire alarms.

Our Quotes
Liberty Mutual$893 Per Year
State Farm$1,087 Per Year
Amica$1,184  Per Year

Keep in mind that quotes vary from person-to-person, so don’t expect your quotes to match up exactly. You might find that our most expensive provider can offer you a great deal — or, conversely, our most competitive quote could be your highest.

While a company without a reputation could offer you a great price, it’s important to know that your insurance provider will be able to pay up in the event of damage to your home. For that reason, we recommend only considering insurers who meet strict standards for financial security and fiscal outlook. Customer satisfaction is crucial, too, so we’ve gone ahead and listed several more providers that meet the following qualifications:

What You Should Know Before Getting a Quote

How do rates compare in New Jersey?

Average rates for home insurance nationwide are roughly $1,096 per year. New Jersey’s rates clock in at $1,058 — just $38 less. That means rates in New Jersey are right on par with the rest of the country.

The cost of insurance may vary slightly depending on where you live in the state, but you can expect rates in line with the national average.

What do I need to prepare?

You’ll be asked all sorts of questions when applying for insurance quotes. Some you’ll know by heart, and others will be specific to the inner-workings of your new home. Keep a copy of your property’s listing sheet close by — it will list a lot of the information that insurers will ask you about.

If this isn’t your first homeowners insurance policy, you’ll need details on your previous ones, including any information about claims you made. Your claims history can unfortunately be used to raise your rates, but it’s important to be honest on your questionnaire, or you risk having your claim denied down the road.

Is a low deductible worth the cost?

A reliable way to lower your annual premium is to raise your deductible. You’ll end up owing more out of pocket if you need to file a claim, but hopefully that’s infrequent enough that your annual premium savings pay for it over time.

Filing too many claims can raise your insurance rates significantly, and some companies will even cancel your coverage. It doesn’t seem right that you’re punished for using a service you pay for, but unfortunately, that’s just the way it goes in the insurance industry. So it’s best to keep your claims down, which is why a high deductible might pay off.

If you don’t think you’ll have the cash to pay for a higher deductible out of pocket in case of a disaster, it’s okay to pay a bit more for a plan with a low deductible. Just weigh your finances with the amount of risk you’re comfortable with.

Will my credit score affect how much I pay?

Chances are, if you’re buying a new home, you know your credit score and have dedicated time to making it as high as possible. If you haven’t, it could cost you. Home insurance rates spike 35 percent for New Jersey residents who have “Fair,” rather than “Excellent” credit. That could cost you hundreds of dollars a year in extra insurance payments. If your credit isn’t perfect, make sure to give your insurer another call to reassess your rates once it’s back up.

What else is covered under my homeowners insurance policy?

Home insurance covers your belongings even when they’re not at home. If you lose your wedding ring on vacation, for example, you’ll be covered. Just make sure you do a thorough home inventory and outline valuable possessions on your policy. Remember to include fine art, collectibles, rugs, and jewelry.

If your home is damaged to the extent that you can’t live in it, you won’t be out on the street. You homeowners insurance includes Alternative Living Expenses (ALE) so you can pay for a hotel or rental home while you wait for your property to be repaired.

Liability insurance is included in your policy, so you’ll be covered up to a certain amount if you’re sued. Your insurance will also pay for a portion of the medical bills if someone is hurt on your property — even if it’s not your fault.

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FAQs

What kind of policy should I get?

Some insurance policies cover only a small list of causes of damage. HO3 policies, however, cover everything except for a small list of exemptions. Getting an HO3 policy is your best bet at securing coverage that doesn’t come with hidden gaps. Since these policies are upfront with what they don’t cover, you won’t be left worrying what scenario might leave you vulnerable to a major expense.

Most companies will offer HO3 exclusively, but you should double check once you’ve narrowed down providers. You might find that a significantly cheaper quote isn’t an HO3 policy, and therefore doesn’t offer enough coverage.

How much insurance do I need?

The magic number is exactly how much it would cost to rebuild your home in the event of catastrophic damage. While it’s unlikely you’d need to cash in on this full amount, being underinsured will cost you big time, even if the damage is minor.

Let’s say you insured your home for only 75 percent of its value. Now a small fire in the kitchen has caused $15,000 of structural damage. Even though that’s much less than the value you insured your home for, your provider will only pay 75 percent on the claim, since you’re underinsured. So you’ll be out $3,750, plus the cost of your deductible. It’s a risk that isn’t worth taking, so have your home’s replacement value assessed, and keep it updated if you ever make home improvements.

What about flood insurance?

Damage from flooding is, surprisingly, not covered by a typical homeowners insurance policy. You’ll need to secure outside coverage, particularly if you live in a floodplain, where it’s legally required. Flood insurance is underwritten by the federal government, and you can learn more and purchase it right here. If you’re not sure whether or not you need flood coverage, talk to your real estate agent or another industry professional.

What other gaps are common in home insurance coverage?

Most insurance policies don’t include water backup/sump pump overflow coverage standard. This is a common source of expensive damage, so it might be a good idea to tack it on, depending on the way your home is constructed. Talk to an insurance agent to find out if the cost is worth the risk.

If you own your home alone but live with roommates or a significant other, make sure that everyone is covered, whether on your policy or with outside insurance. A real estate investor and attorney who blogs anonymously for YETInvesting.com gave us this tip:

“If you’re seeking insurance for a home where you live with your boyfriend or girlfriend, and you are not married, be sure to tell your insurance agent early in the process. My homeowners insurance company said that it would not cover damage to or loss of my boyfriend’s belongings which were kept in my house, so he had to buy a separate renter’s insurance policy for that…Some companies will make the process simpler by just checking the box saying you’re married, even if you’re not. But that’s risky because the insurance company might use that misstatement as a reason to deny coverage in the event of a loss.”

How can I lower my premium?

Hundreds of variables are assessed when you apply for home insurance, and each company takes different things into consideration. Something that earns you a major discount at one provider may not make a difference at another. Generally, however, there are a few factors that almost always raise or lower your homeowners insurance premium.

Things that often raise your home insurance premium:

  • Swimming pool
  • Pets, particularly certain dog breeds
  • Trampoline
  • Playground or other backyard equipment
  • Smoking or living with a smoker
  • Previous claims on your home insurance
  • Low credit score

Ideas to lower your payments:

  • Install deadbolt locks
  • Smoke detector that reports to fire station
  • Burglar alarm that reports to police station
  • Fire extinguishers
  • Indoor sprinkler system
  • Get LEED certified
  • Bundling home insurance with auto/other insurance policy
  • Paying annually instead of monthly

Take Action

If you’ve finished this article, you’re more informed than most other consumers shopping for home insurance. There’s a lot to remember, so keep our article handy and check back when it’s time to refine your quote and pick a provider. Double check for gaps in your coverage, ways you can get a discount with your insurer, and what extras your policy covers.

The best way to get started is to jump right in and apply for several quotes from trusted insurers. Here’s our cheat sheet:

Freshome’s Recommended Homeowners Insurance Companies in New Jersey: State FarmAmicaLiberty MutualTravelers InsuranceAllstateAmerican FamilyChubbGEICO

Compare Homeowners Insurance Rates

To quickly find and compare rates in your area, enter your ZIP code below.

Enter Your ZIP Code: