September 2, 2025
New Jersey homeowners enjoy lower-than-average premiums, but coastal storms, floods, and rising risks are reshaping the market. Learn how to stay protected.
New Jersey's homeowners insurance market presents a complex landscape where coastal risks meet affordability challenges. Despite facing significant environmental pressures from Atlantic storms and flooding, the Garden State maintains relatively lower average premiums compared to many states. However, emerging trends suggest this favorable position may be shifting as climate change and market dynamics reshape the industry.
According to MoneyGeek, average premiums in New Jersey are approximately $1,200 annually for homeowners insurance, compared to the national average of $2,423. This represents approximately 39% lower premiums than the national average, though actual costs will vary by home, location, and underwriting factors.
The state's relatively lower average rates stem from several factors, including a stable regulatory environment and competition among carriers. Leading providers include USAA, NJM, Allstate, State Farm, and Travelers, with Selective offering rates starting at $531 per year for some profiles.
New Jersey's insurance landscape varies dramatically by location, reflecting the state's diverse risk profile:
Urban areas like Newark and Camden typically see higher premiums due to increased theft, fire, and liability risks. Premiums can range from $1,190 in Elizabeth to $1,384 in Newark, demonstrating how local factors influence pricing.
Properties in coastal areas face unique challenges that may impact insurance costs. ZIP code 08203 has some of the highest rates in New Jersey at $2,335 annually, reflecting the elevated risk in shore communities. Coastal properties often encounter:
New Jersey's flood disclosure law, signed by Governor Phil Murphy in July 2023, requires sellers and landlords to reveal flood history and risk information. This transparency initiative addresses the reality that many New Jersey homes sit in moderate to high-risk flood zones.
The National Flood Insurance Program (NFIP) remains the primary source of flood coverage, though private flood insurance options are expanding. After Hurricane Sandy, many carriers began requiring elevation certificates for coastal properties, adding complexity to the underwriting process.
New Jersey's high water table and coastal location make certain water-related coverage options commonly considered by homeowners:
Many New Jersey homes, particularly in historic districts, are older and may be viewed as higher risk due to outdated electrical systems. Insurers often require updates to:
New Jersey operates without a traditional FAIR Plan for high-risk properties, unlike many coastal states. Instead, the state relies on non-admitted markets and specialized carriers for difficult-to-place risks. Key regulatory features include:
Three New Jersey counties Cape May, Atlantic, Hudson rank in the top 100 nationwide for the biggest increase in non-renewal rates between 2018 and 2023. This trend reflects insurers' growing concern about coastal exposure and extreme weather events.
Since 2018, home insurance costs in New Jersey have increased more than 15%, with homeowners seeing a 4.5% rise in premiums during 2023 alone. These increases primarily stem from:
Insurance companies like State Farm have dropped homeowner policies in New Jersey, part of a broader pattern of carrier withdrawals from high-risk markets. Regulatory processes in states like New Jersey, where Department of Insurance restrictions have historically affected rate adjustments, pose ongoing challenges.
The pattern typically involves insurers first raising prices, then exiting markets when rate increases prove insufficient to offset risks. This trend mirrors challenges seen in California and Florida, though New Jersey has not yet reached crisis levels.
Based on 2024-2025 rate data from various industry sources, New Jersey premiums are generally lower than those in surrounding states:
Sources: Delaware rates from MoneyGeek and NerdWallet; Pennsylvania rates from Insurance.com and NerdWallet; New York rates from MoneyGeek and Insurance.com; Connecticut rates from MoneyGeek
Only Delaware appears to offer consistently lower average premiums. Delaware's advantage may stem from lower average crime rates and less property to insure, while Pennsylvania's higher costs reflect different risk factors and market dynamics.
The New Jersey homeowners insurance market faces ongoing pressure from multiple fronts. Premium growth is projected to continue in 2025, though potentially at a more controlled pace as insurers achieve better profitability. However, the impact of potential weather events remains a variable, especially for states prone to extreme weather.
For mortgage servicers and lenders dealing with the complexities of New Jersey's insurance market, partnering with Covered may help reduce call center operational expenses while potentially improving customer experience. By providing warm transfers to insurance experts who understand New Jersey's market dynamics (from coastal risks to regulatory requirements), such partnerships may help ensure customers receive appropriate coverage guidance and competitive rate information. This approach may allow servicers to focus on their core business while helping ensure borrowers are properly protected against the state's diverse risk landscape.
New Jersey's homeowners insurance market reflects the broader challenges facing coastal states in an era of climate change and economic uncertainty. While the state maintains relatively lower average premiums compared to national averages and many neighboring states, emerging trends suggest continued upward pressure on premiums.
Success in this market requires understanding the interplay between location-specific risks, regulatory requirements, and carrier appetite. Whether purchasing coverage for a historic home in Princeton, a coastal property in Atlantic City, or a suburban residence in Central Jersey, informed decision-making and professional guidance remain important for securing adequate protection at reasonable costs.
The market's evolution will likely favor homeowners who proactively manage their risks, maintain strong credit profiles, and work with knowledgeable insurance professionals who understand New Jersey's unique challenges and opportunities.
This article provides general information about New Jersey’s homeowners insurance market based on available industry data as of 2025. Individual circumstances vary significantly, and premium quotes, coverage options, and policy terms differ by insurance company. Consumers should consult with licensed insurance professionals for specific coverage recommendations and current pricing. Information presented should not be considered as guaranteed outcomes or personalized insurance advice.
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*Savings claim based upon averaging actual anonymized savings data for dwelling-only insurance rates paid (from July 2023 - June 2024) by customers of two of Covered’s largest mortgage industry partners across twenty-seven (27) US states. Bundles and non-dwelling insurance coverages were excluded.
† Net Promoter Score (“NPS”)® calculation averages post-purchase customer satisfaction surveys from 9/24/2024 - 2/28/2025. NPS® is a market research metric measuring customer satisfaction with a scoring calculation that incorporates both detractor and promoter customer feedback.
Quotes are presented solely for your convenience. Savings may vary. Rates are subject to change based upon the specific coverage you select and other factors that apply to your situation. CA License #0M81402, doing business as Cubbard Insurance Solutions in California.
