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6 Things You Need to Know About Coastal Home Insurance in NJ

siadmin September 26, 2019 Home Insurance

Coastal home insurance is a necessity for New Jerseyans living along the coast. While extraordinarily beautiful, beachfront properties are at a higher risk for flood hazards, wind hazards, wave hazards and erosion hazards.

As a native New Jersey company, Soden Agency has been helping people protect their beach homes since 1925. After working in this industry for many decades, we feel that anyone with a coastal property should know these six things about coastal home insurance.

Coastal insurance protects homes along the coast.

Coastal insurance in NJ is a type of standard homeowners or non-standard policy. These policies often come with separate deductibles for hurricanes, named storms and/or wind. Fortunately, coastal home insurance is more affordable than it was a few years ago. There are also different deductibles and pricing to choose from.

Insurance carriers have different requirements when insuring coastal homes.

You may be surprised to hear that your home is considered “coastal” by an insurance company, regardless fo whether it is your primary or  second home in NJ.  Insurance carrier definitions vary wildly.  Some carriers consider your home coastal if you are 6-10 miles or more inland, but most agree that properties 2 miles or less from tidal water are “coastal.”

Hurricane and windstorm deductibles are not the same thing.

Coastal insurance policies can be difficult to understand! One of the complexities is the separate deductibles. For example, hurricane and windstorm deductibles are different, even though they sound similar. Hurricane deductibles apply to damage caused by a hurricane. Windstorm deductibles apply to wind damage.  It is importnant to note that both types of deductibles are applied to the replacement cost of your home, not the claim.

Deductibles are in percentage form.

Another confusing aspect of coastal insurance is the way the deductibles pay out. Your standard deductible is usually a straightforward dollar amount. However, for coastal insurance, it’s a percentage deductible. These deductibles can be a flat fee or between 1% and 5% of your home’s value. Once again, it is important to note that both types of deductibles are applied to the replacement cost of your home, not the claim.  So, if your home is insured for $500,000 and you have a 5% hurricane deductible, this means you must pay $25,000 before the insurance company pays anything!  Sadly, many of the national, direct-to-consumer home insurance companies are automatically applying 5% hurricane deductibles to homes nowhere near the coast of NJ.  The good news is that as of 2019, you should now be able to get a hurricane dedutible of less than 5% in NJ – but you will likely need to speak to an independent insurance agent like us.

Home insurance is not the same as flood insurance. 

Don’t confuse home insurance for flood insurance. Flood coverage is excluded from home insurance policies, even if you have coastal coverage. If you want/need flood insurance, you can purchase it separately through us.  We offer private flood insurance policies in addition to the National Flood Insurance Program.

Not all coastal policies are the same.

It’s true. Not all coastal policies are created equal. To get coverage that meets your needs and budget, work with a trusted insurance carrier who understands your property, your location and your coverage options. This prevents gaps in your policy and ensures you have what you need if a storm or hurricane rips through.

Soden Agency has been protecting New Jersey coastal properties for decades. Contact us for a free quote on coastal home insurance.