Every year from June to November is hurricane season. The National Oceanic and Atmospheric Administration (NOAA) of the United States predicts that there is an 85% chance of hurricane activity exceeding normal levels this year. Insurance premiums in hurricane-prone areas across the United States, including New Jersey, are expected to rise.
In the past, hurricanes mainly affected the coastal areas of New Jersey, but that is no longer the case. The entire Garden State is vulnerable to hurricane damage from strong winds, tidal flooding, and storm surges.
According to the New Jersey Insurance Commission, taking Superstorm Sandy in 2012 as an example, there were a total of 470,000 insurance claims, including 337,400 homeowners’ claims and over 56,000 auto claims. In 2021, Hurricane Ida caused approximately $2.02 billion in losses in New Jersey. Somerset County alone suffered nearly $165 million in losses with 13,228 claims. Middlesex County received a total of 14,084 claims, with claim amounts around $155 million.
Homeowners and Tenants Insurance
Given that the entire state of New Jersey is susceptible to hurricane damage, understanding the coverage of homeowners’ insurance is crucial. This includes knowing whether it includes replacement cost insurance and actual cash value insurance.
Replacement cost insurance covers the full cost of repairing or purchasing a new item. Actual cash value insurance covers the value of an item after depreciation is deducted.
Tenant insurance covers damaged items inside a home after a storm.
Insurance policies may also offer “Additional Living Expenses” (A-L-E), which can cover hotel bills, meal expenses, and other related costs incurred when forced to leave home due to a hurricane or severe weather.
Saving on Insurance Premiums
There are over 131 companies in New Jersey that offer homeowners’ insurance. Insurance coverage must be purchased in advance and cannot be obtained after an event occurs. Therefore, when purchasing insurance, it is essential to read the policy’s declarations page to understand what is covered and what cannot be claimed. Assessing the level of coverage you can afford, bundling insurances, and increasing deductibles can help reduce insurance premiums in the short term.
Take inventory of your home and possessions; ensure that the roof, shingles, and siding are in good condition; secure drainage pipes.
If you upgrade electrical, plumbing, and heating systems, inform your home insurance company, as this may help save on premium costs.
Flood Insurance
With over 400 cities in flood-prone areas in New Jersey, more than two-thirds of the state is at risk of flooding to some degree. However, homeowner and tenant insurance do not cover flood damage, necessitating the purchase of separate flood insurance. According to data from the National Flood Insurance Program, 90% of properties in New Jersey do not have flood insurance.
Damage to Vehicles
If a car is damaged during a hurricane or other weather-related event, comprehensive coverage included in the insurance policy will compensate for the damages.
If a tree falls on a car, if there is corrosion from saltwater, or if an item is thrown onto the car roof by strong winds causing damage, the comprehensive section of the car owner’s insurance policy will cover such damages.