It's no secret that Garden State residents pay more for just about everything in their lives. From Newark to Cape May everything—gas, food, shelter, clothing, entertainment—in New Jersey is a bit more expensive than the rest of the country as measured by the Consumer Price Index. Home insurance is another fact of life that Jersey residents pay dearly for (though not nearly as much as their New York neighbors). But there is hope. If you know what your needs are and you comparison shop, you can save hundreds on your New Jersey house insurance every year. It's really not hard. Let's take a look.

New Jersey Home Insurance Q & A
The first thing to do is have a small understanding of just what New Jersey home insurance is. Here are some common questions with answers:

What does home insurance cover?
Today's most popular policy is called an HO-3 and contains the following coverage at varying amounts.

  • Damage to your dwelling from named perils like fire, lightning, etc.
  • Damage to your personal property.
  • Liability protects you against civil suits when others are injured on your property.
  • Medical Payments pay for medical expenses when others are injured on your property.
  • Additional Living Expenses pay for you to live elsewhere when your home is unlivable.

There are other coverages you can add, but these are the main components you'll find in a standard policy.

How much coverage do I need for my home?
This is the replacement cost and does not include the land. It's the cost to rebuild the dwelling at today's construction market prices. It's not the market value or tax appraised value. A good place to start is to know the home's square footage and your local market's construction cost per square foot. If you have a mortgage, the lien holder may require a certain amount of coverage.

What is the difference between "actual cash value" (ACV) and "replacement cost"?
ACV usually applies to personal property coverage and takes depreciation (age, wear, tear) into consideration when calculating for a loss. Replacement cost replace, repairs, or rebuilds using the same or similar materials without considering depreciation.

Sample New Jersey House Insurance Rates
In 2010, the New Jersey Department of Banking and Insurance conducted a survey of over 80 insurance companies. Here are a couple of scenarios to give you an idea of the broad range in rates out there.

Trenton HO-3 example: $225,000 dwelling coverage for home less than five years old.
Personal liability of $300,000, medical payments $1,000, and a $500 deductible.
Rates range from $344 to $1,806!

Newark HO-3 example: $225,000 dwelling coverage for home less than five years old.
Personal liability of $300,000, medical payments $1,000, and a $500 deductible.
Rates range from $365 to $2,578!

Woodbridge HO-3 example: $225,000 dwelling coverage for home less than five years old.
Personal liability of $300,000, medical payments $1,000, and a $500 deductible.
Rates range from $311 to $2,126!

Saving on New Jersey House Insurance Rates
Those are big differences in rates. You can do the same thing as the State of New Jersey—comparison shop—just by using LocalInsurance. LocalInurance will search the web for the best New Jersey home insurance rates. You'll be able to compare policies and prices from a handful of different agents in your area. It's free and takes just minutes.

If you are interested in learning more about New Jersey home insurance, there are a number of resources that are offered by the state. New Jersey has a Department of Insurance which can help ensure that you have the appropriate coverage for your home and provide you with useful information when selecting a homeowners insurance policy.