If you live in a high-risk flood zone as designated by FEMA, your mortgage lender can require you to carry flood insurance in New Jersey. Your regular homeowners policy probably does not offer coverage for floods.

Did you know that only 10.25% of NJ households have flood insurance compared to 27% of Americans? Even worse, flooding is way more likely in New Jersey than in many other parts of the country.

Weather patterns are becoming more intense, as the past decade in Jersey has proven. It’s extremely important to understand what flood insurance covers and determine whether you need it—before it’s too late. Here’s a quick guide from home and

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about how flood insurance works in New Jersey.

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What is flood insurance?

Flood insurance will reimburse you for covered losses if you suffer water damage due to flooding. It is a type of property insurance, but it is generally not included in your normal coverage.

Check your policy to find out. You may see that you have coverage for water damage due to plumbing failures and windstorms—but not flooding. This means that your house and your belongings have no coverage if they are damaged in a flood. That’s why it’s so important to purchase a separate flood policy.

What does flood insurance cover?

A flood insurance policy may cover one or both of the following: the building and its contents.

If your building is covered, your physical structure has protection down to the studs (carpeting, walls, etc). On the other hand, contents coverage covers your possessions like furniture, clothing, and electronics.

Together, your flood insurance policy may provide financial protection for the electrical system, heating and cooling systems, appliances, furniture, electronics, and more.

Note that flood insurance will not cover every object in your home, nor will it cover every type of flooding. For instance, you probably won’t have coverage if a sewer backup results from widespread flooding across more than one acre. Similarly, cash, cars, and property stored in the basement will probably not be covered.

So what is covered? Here’s a more detailed breakdown of what’s covered (and what isn’t) under each type of insurance:

Type of coverage	What it covers	What it doesn’t cover
Building	Electrical and plumbing systems Water heaters and furnaces Large appliances like dishwashers or refrigerators Permanently installed bookcases, cabinets, and paneling Permanently installed carpets Window blinds Foundational walls, staircases, and anchorages Detached garages Fuel tanks, solar panels, and well water tanks/pumps	Decks and patios Swimming pools Fences and landscaping
Contents	Clothing Furniture Electronic equipment Curtains Washing machine and dryer Portable air conditioners, including window units Carpets not included in building coverage Valuables such as artwork up to $2,500	Valuable papers Currency Anything stored in a basement

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MORE: Does home insurance cover flooded basements?

Do you need flood insurance in New Jersey?

In short, probably. The long answer is that it depends on your specific neighborhood and your risk profile.

There is no statewide requirement that says New Jersey homeowners must carry flood insurance. However, a federal mortgage lender can require a borrower to carry flood insurance if the home is in a high-risk flood zone.

Even if you are not required to carry it by your lender, flood insurance is a wise idea if you live near the Jersey Shore or on a floodplain.

Not sure? Start by finding out the likelihood of a flood in your area by entering your information into a

FEMA map

. FEMA (Federal Emergency Management Agency) researches and publishes flood risk information online.

Your policy may come through the

National Flood Insurance Program (NFIP)

which sells flood insurance to homeowners based on the risk level determined by FEMA. To buy an NFIP policy, you must live in one of NJ’s participating communities (find the

list here

However, anyone can buy flood insurance from a private company—and it’s a good idea if you’re in an area that experiences frequent flooding like Ocean City where 81% of all properties are at risk.

What flood zones require flood insurance in New Jersey?

Flood zones are

coded

with a letter grade that begins with either A, V, X, B, and C. Then, there are various sub-groups such as AO and AE.

In New Jersey, homeowners with a property located in a zone beginning with A or V must carry flood insurance.

It’s important to note that A and V zones are not the only areas that experience flooding. In fact, more than 20% of NFIP claims are made by policyholders in an X, B, or C zone. Rather, your flood risk is lower in these areas so you’re not compelled to carry flood insurance.

Flood Factor®

is a good resource to help you determine your home’s level of risk.

Key Takeaway If you live in a designated high-risk flood zone (starting with A or V) and have a federally-backed mortgage, you must purchase flood insurance.

How much does flood insurance cost in New Jersey?

The national average cost of flood insurance is $739 per year. Unfortunately, New Jersey’s average flood insurance premium is considerably higher at $949 per year or $79 per month.

However, there is a new pricing methodology coming in April 2022 thanks to the NFIP. Due to more accurate calculations, the majority of New Jersey homeowners can expect their monthly premiums to decrease.

Your specific policy cost depends on far more than just your state, of course. The age, size, and type of the insured property can either raise or diminish your monthly premium. Note that the coverage limits for residential customers are $250,000 for building coverage and $100,000 for contents coverage. Your provider may also set a deductible limit on your policy.

MORE: How much water damage will total a car?

How to save money on flood and auto insurance in New Jersey

Here are some budget-savvy ways to reduce the cost of flood insurance in New Jersey:

Follow FEMA’s

Choose a higher deductible

Submit an

elevation certificate

to your insurance agent

Choose contents-only coverage

Be aware that flood insurance doesn’t cover damage to cars. Go to

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to ensure that you have an affordable car insurance policy with the proper coverage. The entire process takes 45 seconds and you’ll get end-to-end support while you sign up for a new policy.

On average, Jerry users nearly $900 a year on car insurance—that could pay for an entire year of flood insurance in New Jersey!

“My policy covers two people and four cars: a truck, SUV, convertible, and muscle car.
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