Guide to Flood Insurance in New Jersey

Flood insurance usually isn’t required for New Jersey homeowners. But if you live in a high-risk flood area, you might need to purchase flood insurance to qualify for a mortgage.

Sarah Sharkey
Written bySarah Sharkey
Sarah Sharkey
Sarah SharkeyInsurance Writer
  • 7+ years writing insurance and personal finance content

  • Contributor to top media, including USA Today

A passionate personal finance advocate, Sarah’s writing has graced the pages of many of the personal finance and insurance industries’ top web publications.

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Chris Schafer
Edited byChris Schafer
Chris Schafer
Chris SchaferSenior Editor
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  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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Updated March 20, 2024

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Many homeowners make the mistake of overlooking flood insurance until it’s too late. Since a standard homeowners insurance policy doesn’t include protection against flood damage, many homeowners don’t realize they’re missing the coverage they need.

A recent Insurance Information Institute poll found that only 27% of homeowners carry flood coverage.[1]

This type of coverage is especially important for New Jersey residents, as New Jersey is one of the five states responsible for 67% of National Flood Insurance Program damage claims since 1978.[2]

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

Quick Facts
  • Flood insurance excludes many things, such as precious metals, currency, temporary housing costs, and more.

  • While flood insurance might not be a legal requirement, your mortgage lender may require you to carry flood insurance if you live in an at-risk area.

  • You can purchase flood insurance through the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency, or from some private insurers.

The risk of flooding in New Jersey

Many of New Jersey’s densely populated urban centers lie in flood-prone areas. In fact, around 54% of the state’s total population lives in flood-prone coastal areas, according to the Rutgers New Jersey Climate Change Resource Center.[3]

The Garden State ranks in the top five states for damage claims filed with the NFIP. Some of the most memorable flooding events in the state included Tropical Storm Irene and Superstorm Sandy, which each caused billions of dollars in damage.[4]

But a hurricane doesn’t need to occur for your home to be at risk of flood damage. It’s possible to experience flooding caused by heavy rain or melting snow, for example.

Read More: How to Buy Flood Insurance

Read More: How to Buy Flood Insurance

How to determine your flood zone

Everyone technically lives in a flood zone. But where you live has a big effect on how likely it is that you’ll experience a flood. To understand your property’s level of risk, visit FEMA’s Flood Map Service Center. You can search for your property’s address to determine what type of flood zone you live in.

Here’s a breakdown of how your flood zone designation correlates with your risk of experiencing a flood:

  • Zone A has a 1% or more chance of annual flooding.

  • Zone AE replaces the old numbered A zones and is subject to a 1% or more chance of flooding.

  • Zones AH and AO fall under the 1% or more risk of annual flooding and typically have average flood depths of one to three feet.

  • Zone AR has a temporarily increased flood risk from ongoing restoration of the flood protection system.

  • Zone A99 has a 1% or greater chance of flooding annually but will be protected by the federal flood protection system.

  • Zone V is found in coastal areas. It has a 1% or greater annual chance of flooding and can experience storm-induced waves.

  • Zones VE and V1 to V30 are in coastal areas and have a flood risk of 1% or more along with storm-induced waves. Zone VE is replacing previously numbered V zones.

  • Zone D might have a flood risk, but it’s undetermined.

  • Zone X, if shaded, is replacing Zone B. These areas have a moderate flood risk.

  • Zone X, if unshaded, is replacing Zone C and has minimal flood risk.

How the NFIP works in New Jersey

The National Flood Insurance Program (NFIP) is available through the Federal Emergency Management Agency (FEMA). It allows homeowners across the country, including those in the Garden State, to purchase relatively affordable flood insurance.

The NFIP lets you purchase federal flood insurance, regardless of how likely your home is to flood.

While some homeowners can purchase insurance directly through the NFIP, most federal flood insurance is sold through Write Your Own (WYO) companies. When you work with a WYO company, the policy is guaranteed by an arrangement with the Federal Insurance Administration. This allows most homeowners to find reasonable premiums.

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How much is flood insurance in New Jersey?

The exact cost of your flood insurance will vary based on your location and the corresponding level of risk. Below is a closer look at the average cost of flood insurance based on your risk.

Flood ZoneAverage Annual Cost
NFIP flood insurance in all NJ flood zones$920
NFIP flood insurance for high-risk areas$1,306
NFIP flood insurance for low and moderate-risk areas$676

What does flood insurance cover?

If you purchase flood insurance, it’s important to read the fine print of the policy to determine exactly what your policy covers.

Most flood insurance policies are divided into dwelling coverage and contents coverage.

Here’s a closer look at each.

  • illustration card https://a.storyblok.com/f/162273/100x100/c922a01b77/house.svg

    Dwelling coverage

    Dwelling coverage typically includes the following:

    • Electrical and plumbing systems

    • Furnaces and water heaters

    • Refrigerators, cooking stoves, and built-in appliances, like dishwashers

    • Window blinds

    • Foundation walls, anchorage systems, and staircases

    • Detached garages

    • Fuel tanks

    • Well water tanks and pumps

    • Solar energy equipment

    • Permanently installed carpeting, cabinets, paneling, and bookcases

  • illustration card https://a.storyblok.com/f/162273/100x100/32ed42213e/personal-property.svg

    Contents coverage

    Contents coverage is more focused on the items inside your home and will generally cover your:

    • Personal belongings

    • Clothing

    • Furniture

    • Electronic equipment

    • Curtains

    • Washer and dryer

    • Portable and window air conditioners

    • Microwave oven

    • Valuable items, like artwork or jewelry, up to a policy-specific limit

What isn’t covered by flood insurance?

Flood insurance doesn’t cover everything. While your policy may differ, most flood insurance policies don’t cover the following losses:

  • Temporary housing costs

  • Belongings outside of the dwelling, like patio furniture and fences

  • Precious metals

  • Currency

  • Stock certificates

  • Vehicles

  • Personal property stored in the basement

  • Financial losses due to paused business operations

How to buy flood insurance

If you want to protect your home from flood damage, it’s time to purchase a flood insurance policy. Property owners can generally choose from private flood insurance and government-provided flood insurance.

Government-provided flood insurance

Even though FEMA manages the NFIP, it doesn’t sell policies directly. Instead, NFIP flood insurance is provided through insurers that partner with the NFIP.

You can also use the flood insurance provider locator at Floodsmart.gov to find a participating insurer near you. Finally, you can contact your local independent insurance agent to get more information about NFIP options in your area.

Just remember that NFIP options are available only in communities that participate in the program and follow sound floodplain management strategies.

If you opt for an NFIP policy, expect a 30-day waiting period. Additionally, NFIP policies tend to cost more than policies offered by private insurers. You’ll also see coverage limits of up to $250,000 for the building and $100,000 for the contents.[5]

Private flood insurance

Many insurers offer flood insurance and have more flexibility to build a policy that works for your unique situation. If you don’t qualify for NFIP coverage or want higher coverage limits, private policies can be an excellent option.

The process to buy private flood insurance is similar to how you’d buy an NFIP policy, with one exception — while the cost of an NFIP policy is the same no matter which insurance company you use, insurers can charge different prices for private flood policies. So it’s important to shop around and get a flood insurance quote from multiple insurance companies to find the best rate for you.

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New Jersey flood insurance FAQs

If you still have questions about how to find the most affordable flood insurance in New Jersey for you, the following answers can help.

  • Is flood insurance required in New Jersey?

    The state doesn’t require flood insurance. But your mortgage lender may require you to carry flood insurance while you pay off the loan.

  • Is flood insurance expensive if you aren’t in a flood zone?

    In general, flood insurance will be more expensive for homeowners who live in a high-risk flood zone. But even if you live outside these areas, flood insurance can still cost a significant amount of money.

  • Do you still need flood insurance if you’ve paid off your mortgage?

    If you’ve paid off your mortgage, a lender can no longer require you to carry flood insurance. Although you may not legally need to carry flood insurance, you’ll have to decide whether you want to carry coverage to protect your finances. For homeowners in high-risk parts of the nation, continuing to carry flood insurance may make sense.

Sources

  1. Insurance Information Institute. "2020 Triple-I Consumer Poll."
  2. USA Facts. "Which states have been hit the hardest by flooding?."
  3. Rutgers New Jersey Climate Change Resource Center. "The National Flood Insurance Program and New Jersey."
  4. National Weather Service. "Flooding in New Jersey."
  5. FEMA. "Understanding your policy terms."
Sarah Sharkey
Sarah SharkeyInsurance Writer

Sarah Sharkey is a personal finance writer who enjoys helping people make savvy financial decisions. She covered insurance and personal finance topics. You can find her work on Business Insider, Money Under 30, Rocket Mortgage, Bankrate, and more. Connect with her on LinkedIn.

Chris Schafer
Edited byChris SchaferSenior Editor
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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