New Jersey Homeowners Insurance Guide

As the most densely populated state in the Union, New Jersey stands out above the rest for its unique style and ability when it comes to homebuilding, home ownership and homeowner issues. One way in which New Jersey is completely like the other states is when it comes to the issue of homeowners insurance. A blanket of protection for a homeowner, homeowners insurance is usually mandated by a mortgage lender for someone who is buying a house, but the mandates by most lenders are minimal and may not offer an adequate amount of coverage for a homeowner in the event of a damage of incident. For this reason, every homeowner is wise to consider raising their minimums and to think carefully about the possibility of disaster and replacement costs.

The Complete Package

Homeowners insurance policies are offered as package policies which means that they cover the home and everything in it under most circumstances. There are some exceptions to coverage - such as if you run a business out of your home and have employees coming to and from your home, they will not be covered under your homeowners insurance policy - rather they should be covered by workers’ compensation insurance as mandated by your state’s laws. Here are some of the insurance coverage offered by a standard homeowners insurance policy and what incidents may fall under its coverage:

• Structure Coverage: A standard homeowners insurance policy in New Jersey will cover the structural dwelling and any attached dwellings like a garage if they are damaged. In New Jersey the most common types of damage caused to homes come from fires, storm damage either due to high winds, heavy snow or lightning strikes. Your homeowners insurance policy will, after evaluation offer you a settlement amount to help you repair the damage to your home if it has not been completely destroyed.
• Personal Property Coverage: Provides money to replace items in your home that are stolen, vandalized or destroyed as in a fire. This is one area in particular where you are well-advised to make sure you have sufficient coverage, especially if you have been living in your home for a long while and have a tendency to - as many of us do - “collect things” over time. A person fresh out of college is much less likely to have more than $30,000 worth of personal effects than someone who has lived and grown a family in a home for 15 or 20 years. A good rule of thumb is to have $5,000, plus $10,000 worth of coverage for every person in the home over the age of 15, and an additional $5,000 for every person under the age of 15. So your typical nuclear family of mother, father, 15 year old daughter and 12 year old son should consider having at least $40,000 worth of personal property coverage.
• Liability Coverage: This coverage provides protection for those who are injured on your property and may need medical attention or file suit against you. It also provides protection for any damage your property may cause to others or the property of others (such as if a tree in your yard falls over during a storm and crushes a neighbor’s car). Rather than worrying about increasing this particular coverage drastically to protect yourself from a lawsuit, consider a good umbrella insurance policy instead which will protect both your home and your car (in an accident), for excessive amounts of damage or liability.
• Living Expenses: If you are forced out of your home temporarily (such as after a fire, or during extensive fumigation), your insurance policy may provide coverage to help pay for expenses like a hotel room or even paying rent at your mother in-law’s house for a few weeks. Not all policies offer this coverage automatically - it need to be requested, so check with your insurance agent or policy documents rather than assuming you are covered.