Your home may be your single biggest investment. As such, it's critical to have adequate insurance. Homeowners insurance provides financial protection if your home is damaged by fire, wind, or storms; your property is stolen or vandalized; or you're held responsible for another's injury or property damage.
Here's our review of several leading homeowners insurance companies in New Jersey.
| Average annual cost | J.D. Power Property Claims | J.D. Power Home-owners | AM Best rating | Best for | |
|---|---|---|---|---|---|
$1,477 | 868 (10) | 815 (11) | A+ | Homeowners seeking coverage options. | |
$1,040 | 880 (5) | 809 (12) | A++ | Homeowners who own a second home. | |
$855 | NA | NA | A+ | Older homeowners. | |
$1,316 | 851 (15) | 801 (15) | A+ | Homeowners seeking discounts. | |
$1,112 | 880 (6) | 829 (6) | A++ | Homeowners who want a trusted brand. |
Best homeowners insurance in New Jersey
Allstate
Best for: Homeowners seeking many coverage options
Allstate is the most expensive of the homeowners insurance companies we surveyed, but the company offers various discounts to help defray that cost. These include discounts for bundling multiple Allstate policies, being claim-free, customer loyalty, owning a new home, making automatic payments, having theft and fire prevention features and early signing. They even offer an insurance reimbursem*nt to homeowners who replace damaged home features with a "greener" alternative.
The company also stands out for its range of optional coverages, allowing homeowners to customize a policy to meet their needs. These options include identity theft protection, water backup, special personal property, sports equipment, yard and garden coverage, electronic data recovery, and musical instrument coverage.
Allstate landed in the middle of J.D. Power's most recent homeowners insurance studies — its 2023 U.S. Property Claims Satisfaction Study and its 2022 U.S. Home Insurance Study. The company is rated A+ by AM Best, which is the analyst's second-highest possible rating. Quotes are available at the Allstate website, through a local agent, or by calling a toll-free number.
Chubb
Best for: Homeowners who own a second home
Chubb claims to be the world's largest property and casualty insurance company. It's also known as a company that positions itself toward high-net-worth clients. It’s perhaps no surprise, then, that the company’s homeowners policy (branded “Masterpiece”) includes features such as a property management service for those with second homes.
Optional coverages available from Chubb include extended replacement cost, post-storm tree removal, electronic data restoration, and a cash-out option for claims. The company also offers services such as a home scan that can detect leaks and faulty electrical connections — helping homeowners avoid dangerous risks.
Chubb has AM Best’s highest rating, A++, reflecting the company’s strong financial stability and ability to pay claims. It also ranks fifth of the 17 companies studied in J.D. Power’s 2023 U.S. Property Claims Satisfaction Study. Those interested in a Chubb policy can get a quote at the company website or through an agent.
NJM
Best for: Older homeowners
Trenton, New Jersey-based NJM Insurance offers the lowest-priced homeowners coverage in our review. The company complements that pricing with numerous savings opportunities, including discounts for having multiple NJM policies; having home safety features such as smoke detectors; having a generator, storm shutters, or hurricane-proof glass; and paying in full. NJM also offers a discount to policyholders over 65 — it is among the few companies that offer such a discount.
NJM's coverage options are similarly broad. They include increased liability limits, scheduled personal property coverage, fraud expense coverage, water backup coverage, earthquake insurance and self-storage coverage. It even offers assisted-living-care coverage, which consists of personal property and liability coverage for relatives living in an assisted-living facility.
NJM is not included in the most recent J.D. Power studies of homeowners insurance providers. However, the company has 4.7 out of 5 stars on Trustpilot, including 90% 5-star ratings (accessed May 13, 2023). The company has an A+ rating from AM Best. Policy quotes are available online or by calling an 800 number.
Progressive
Best for: Homeowners seeking discounts
Although Progressive is known for its car insurance (and ubiquitous advertising), it also offers a homeowners insurance product. Discounts include those for having multiple Progressive policies, home safety features, insuring a new home, paying in full, and getting the initial quote well before the policy start date. Progressive also offers a single deductible for bundled policies. This means that if you have a claim involving both your home and car, you'll only pay one deductible rather than two.
Progressive seems a bit limited when it comes to optional coverages. It only lists water backup and personal injury coverage on its website. The company may offer other options, but it’s not doing much to promote them.
One feature we like is the HomeQuote Explorer, which allows insurance shoppers to compare a Progressive insurance quote with those from multiple competitors. This can help make insurance shopping easy and help the homeowner be confident they're getting the best price. Progressive quotes are available at the company website, over the phone, or through its network of independent agents.
State Farm
Best for: Homeowners who want a trusted brand
According to data from the National Association of Insurance Commissioners, State Farm is the country's largest homeowners insurance company. It also has an A++ rating from AM Best, which is the analyst's highest possible rating for a company's financial strength. State Farm is — and has been for a long time — a company that many homeowners count on for their insurance needs. A 2022 study published by Investor’s Business Daily named State Farm one of America's most trusted auto and homeowners insurance brands.
The company offers discounts for having multiple State Farm policies, home security features, and a fire-resistant roof. Coverage options include additional liability coverage and pet medical. Homeowners can get a quote from the State Farm website or any of the company’s local agents.
How to get the cheapest home insurance in New Jersey
Looking for cheap home insurance in New Jersey? Follow a few tips to help you save money.
1. Shop around for homeowners insurance
The cost of insurance varies between insurance companies and fluctuates over time. For that reason, it’s a good idea to shop your insurance periodically with at least four or five insurers.
2. Ask about homeowners insurance discounts
Most homeowners insurance companies offer a wide variety of discounts. The catch is that you may have to ask the company (or your agent) which discounts you might qualify for.
Common discounts include:
- Having multiple policies with the same company (often referred to as “bundling”).
- Having safety features in your home, such as smoke detectors or a burglar alarm.
- Paying your premium in full, rather than in installments.
- Getting your initial policy quote well in advance of the policy start date.
- Choosing a “paperless” policy.
- Being “claim-free” for a minimum period of time.
3. Increase your homeowners insurance policy deductible
You choose a deductible when you buy a policy. The deductible is a dollar amount you'll be responsible for paying if you have a claim — your share of the cost to repair your home or replace damaged or stolen items. A higher deductible means you'll pay more if you have a claim, but it usually lowers your policy premium.
4. Avoid small-dollar-amount clams
Try to reserve filing an insurance claim only for significant and costly incidents. Filing too many claims in too short of a time can cause you to lose "claim-free" discounts, lead to a policy premium increase, and may even prompt the insurer to cancel your coverage altogether.
5. Consult with an independent insurance agent
Independent agents are licensed professionals who typically represent multiple insurance companies. This means they can shop around on your behalf (saving you time) and serve as a trusted advisor so you can be confident you have the coverage you need at the best possible price.
Understanding your homeowners coverage needs
Homeowners insurance policies commonly include several main coverages.
- Coverage A: Dwelling — Pays to repair or replace your home if it's damaged or destroyed by an event such as fire or wind. This coverage has a limit, or a maximum amount the insurance company will pay in case of a claim. When you buy the policy, you choose the coverage A limit; it's typically based on an estimate of the cost of rebuilding the home.
- Coverage B: Other structures — Coverage B pays to repair or replace structures on the property other than the dwelling. These may include a detached garage, fence, or swimming pool.
- Coverage C: Personal property — Coverage C pays to repair or replace damaged items such as clothing, furniture, appliances, electronics, and other property.
- Coverage D: Loss of use — If you can’t live in your home due to damage from a covered peril, coverage D helps pay for your living expenses.
- Coverage E: Personal liability — Coverage E provides reimbursem*nt if you’re held liable for someone’s injury or property damage. It covers incidents both on and off your property.
- Coverage F: Medical payments — Coverage F provides limited reimbursem*nt for routine medical bills if people are hurt on your property, including by your pets.
Your insurer may also offer additional, optional coverages. You can use these options to customize a policy to suit your individual needs. Examples of these options include:
- Water backup — Pays to repair water damage to your home caused by the failure of a sump pump or back-up of water through drains or the sewer.
- Identity theft — Pays expenses related to recovering your identity after an identity theft.
- Scheduled personal property — Coverage for high-value items such as jewelry, antiques, expensive electronics, and firearms.
- Earthquake — Helps pay to repair damage to your home caused by an earthquake. Such damage is typically not covered under your policy’s dwelling coverage.
- Flood insurance — Helps pay to repair damage to your home caused by groundwater flooding, such as a river, lake, or ocean. This damage is typically not covered by a standard homeowners insurance policy. Flood insurance is provided as a separate policy through the National Flood Insurance Program. If you live in a coastal area of New Jersey or a river floodplain, talk to an insurance agent about this important supplement to your homeowners insurance.
Please note that these coverage descriptions are generalized and are provided only to help you better understand how a homeowners insurance policy works. Contact your insurance company or agent for more information about what your policy does and doesn't cover.
Methodology
Our review looked at six leading homeowners insurance companies in New Jersey. We accessed premium data published online and sourced from Quadrant Information Services. We reviewed each company's performance in relevant, recent J.D. Power reviews of homeowners insurance, including the J.D. Power 2023 U.S. Property Claims Satisfaction Study and the J.D. Power 2022 U.S. Home Insurance Study. We also looked at each company’s rating by AM Best. Finally, we visited each company's website to gather information about coverage options, discounts, and service options.
Frequently asked questions (FAQs)
Is homeowners insurance required In New Jersey?
Homeowners insurance is not required by law in New Jersey. However, if you finance your home with a mortgage, your lender will require you to have a policy.
What does homeowners insurance cover in New Jersey?
A homeowners policy should cover the cost to repair or rebuild your home and unattached structures if they’re damaged by fire, wind or other incident. It should also help pay to replace personal items that are stolen or damaged. Finally, a homeowners policy should protect you financially if you're held responsible for another person's injury or property damage.
What is the country’s largest homeowners insurance company?
State Farm is the largest homeowners insurance company in the US, according to 2022 data from the National Association of Insurance Commissioners. Its 18% market share is double that of the second-largest company, Allstate.
