Flooding is among the most common and costly disasters in New Jersey, yet it’s not covered by standard homeowners insurance. However, you can buy flood insurance from the government-backed National Flood Insurance Program (NFIP) or any of the nearly two dozen private companies that offer it in New Jersey.

Though flood insurance is not cheap, it can save you a lot of money in the event of a flood. Here’s what you need to know about flood insurance in New Jersey.

In this article

How much is flood insurance in New Jersey?

The average cost of NFIP flood insurance in New Jersey is $963 a year, or $80 a month, but your flood zone goes a long way toward determining your rate.

Those with properties in high-risk flood zones pay an average of $84 a month for NFIP insurance, compared to $63 a month for homes in low- and moderate-risk areas.

Private flood insurance rates vary by carrier.

In fall 2021, the Federal Emergency Management Agency (FEMA), which manages the NFIP, rolled out Risk Rating 2.0. This new pricing system is designed to better align a home’s flood risk with its flood insurance rate.

Homes with greater flood risks are getting charged more than before, while those with lower risks are seeing their rates go down.

You can find the flood risk for your own home or one you want to buy online in the Flood Map Service Center on FEMA’s website. Flood zones that begin with the letter A or V are high risk. Zones labeled B, C and X are low and moderate risk.

Flood insurance costs in New Jersey by flood zone
Flood zone Average monthly cost
NFIP flood insurance in all New Jersey flood zones $80
NFIP flood insurance in high-risk areas (zones beginning with A or V) $84
NFIP flood insurance in moderate- and low-risk areas (zones labeled B, C or X) $63
Source: FEMA

Why should I get flood insurance in New Jersey?

Flood insurance is typically required for mortgages in high-risk flood zones, but the prevalence and costs of flooding in New Jersey make it worth considering in many situations when it’s not required for a loan.

One only needs to look back to the devastation that the remnants of Hurricane Ida caused throughout the state in 2021 to understand how floods can strike in areas not traditionally prone to flooding.

FEMA reports that more than 20% of its flood insurance claims nationwide come from outside high-risk flood zones. According to FEMA:

  • One inch of water can cause $25,000 in damage to a home.
  • The average cost of an NFIP flood insurance claim in New Jersey is $47,700.

Flood insurance vs. disaster relief

Flood insurance tends to provide more money than disaster relief grants that may become available after a flood. The average disaster relief grant provides about $5,000, and these funds usually only become available after a flood is declared a national emergency.

Flood insurance can provide up to $250,000 to repair your home and up to $100,000 for your belongings, even if a flood does not meet the threshold for a national emergency declaration.

How does private flood insurance work in New Jersey?

Some Private flood insurance companies in New Jersey offer more coverage than the NFIP, and some private companies can offer a lower rate than the NFIP.

Private flood insurance coverages

Many of New Jersey’s private flood insurance companies offer higher dwelling and personal property coverage limits than NFIP’s maximums of $250,000 for building coverage and $100,0000 for contents.

If the value of your home and/or possessions exceeds the NFIP’s maximum limits, an NFIP policy may not cover all your expenses in the event of a major or total loss.

Many private flood insurance companies also offer loss of use coverage, which is unavailable through the NFIP. Loss of use covers temporary living expenses while your home is being repaired.

NFIP vs. private flood insurance coverage comparison
Coverage NFIP Private flood insurance
Building/dwelling Up to $250,000 Varies by company, but can match your homeowners policy coverage A limit
Contents/personal property Up to $100,000 Varies by company, but can match your homeowners policy coverage C limit
Loss of use Not available Varies by company, but can match your homeowners policy coverage D limit

Private flood insurance rates

Private insurance companies use different modeling systems than FEMA does to assess the flood risks of homes. Depending on a company’s rating system and your location, you may qualify for a better rate for private flood insurance than you do for an NFIP policy. 

The best way to find out for sure is to compare an NFIP flood insurance quote to those you get from private flood insurance companies.

Nearly a dozen New Jersey insurance companies, including Cincinnati Insurance and Narragansett Bay, offer flood coverage as an endorsement to a homeowners policy, according to the state Department of Banking & Insurance.

A half dozen companies, including Homeowners Choice and Zurich American, offer standalone flood insurance.

What does flood insurance cover?

NFIP flood insurance includes building coverage for your home and contents coverage for your belongings. If you rent your home, you can purchase contents-only coverage.

Flood insurance does not cover damage to your car, but comprehensive coverage on an auto insurance policy does.

In addition to the structure of your home, building coverage protects systems and items such as:

  • Electrical and plumbing systems
  • Furnaces and water heaters
  • Refrigerators, stoves and built-in appliances
  • Permanently installed carpeting, cabinets, paneling and bookcases
  • Detached garages

Contents coverage applies to belongings such as furniture, electronics, clothes and certain other items, including:

  • A washer and dryer
  • Portable and window air conditioners
  • Microwave ovens
  • Up to $2,500 for valuables, such as original artwork and furs

It’s important to know about NFIP coverage limitations for basements. In general, NFIP insurance normally does cover basement items such as:

  • Central air conditioners
  • Fuel tanks and the fuel in them
  • Furnaces and water heaters
  • Sump pumps, heat pumps and water well tanks
  • Washers and dryers
  • Air conditioning units
  • Food freezers and any food in them

However, the following basement items are typically not covered by NFIP flood insurance:

  • Personal property kept in a basement, including couches, computers and televisions
  • Basement improvements, such as finished floors and walls
  • Generators kept in a basement

It’s also important to know that NFIP flood insurance only applies to damage caused by a flood, which FEMA generally describes as “an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties.”

If your home or possessions are damaged during a weather event that does not meet FEMA’s definition of a flood, NFIP flood coverage does not apply.

There is a 30-day waiting period for a new NFIP flood insurance policy, but the waiting period is waived for policies that accompany the closure of a home loan. Waiting periods for private flood insurance are sometimes shorter and vary by company.

Where can I buy flood insurance in New Jersey?

NFIP and private flood insurance is widely available through local agents serving most New Jersey communities, so it’s best to start shopping with your current home insurance agent.

Most licensed insurance agents can get authorized to sell NFIP flood insurance by passing a certification test, but not all of them seek authorization. Private flood insurance companies also often make their products available through local agents.

If your current homeowners insurance agent can’t help you, here are additional resources:

  • For NFIP flood insurance, visit floodsmart.gov and select the tab for "Buying a Policy" to find FEMA-authorized agents near you.
  • For private flood insurance, visit the Department of Banking & Insurance website for a directory of New Jersey flood insurance providers.

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