Best Landlord Insurance in New Jersey
- Best Landlord Insurance in New Jersey
For its size, New Jersey has a large population. It’s a popular state for those commuting into New York or Philadelphia. The constant flow of people means rental properties are always in demand.
Landlords in New Jersey need the right insurance coverage to protect their valuable investments. We created an in-depth guide to help you choose the right policy. Keep reading for more information on average landlord insurance rates in New Jersey, common cost factors, cheap providers, and much more.
How Much Is Landlord Insurance in New Jersey?
The average cost of landlord insurance in New Jersey is about $924 per year for a $200,000 home, $1,348 per year for a $300,000 home and about $1,597 per year for a $400,000 house.
Compared to nearby states, these rates are lower than Pennsylvania’s and New York’s average landlord premiums but higher than Delaware’s.
It’s widely reported that landlord insurance premiums are between 15% and 25% higher than homeowners’ premiums on corresponding properties in New Jersey. Keeping this in mind, our team at Clovered was able to generate approximate landlord insurance premiums for New Jersey properties at a few different price points.
Average Cost of Landlord Insurance in New Jersey
Cost of House
Keep in mind that these numbers are only averages, and your premium will vary based on many factors, including property value. We’ll break down some of the most crucial rate variables later. Before estimating how much you’ll spend on landlord insurance, you need to know what policies cover — you don’t want to be underinsured.
What Does Landlord Insurance in New Jersey Cover?
Landlord insurance in New Jersey covers rental property owners’ property and liability in several ways. Landlord policies are highly customizable, but you will almost always have the options of the following coverages:
Dwelling coverage protects the structure of your rental property and many of its permanently attached fixtures. Examples of covered structural components include your roof, walls, windows, siding, and balconies. Other parts you may not think of include your home’s wiring, air conditioning, and septic tank.
Other structures coverage is for features on your property not attached to the main dwelling. These include fences, detached garages, sheds, gazebos, and more. Some rental properties won’t have these, so you may not need this coverage.
Personal Belongings Coverage
Personal property coverage in landlord insurance covers any items you own that you keep on the rental property for your upkeep of the property. These could include snow blowers or lawn equipment. If you don’t have any, you won’t need this coverage.
Landlord Liability Coverage
Landlord liability coverage comes into play if a tenant or guest gets hurt on the property and you’re found liable for the incident. Liability insurance can pay for medical expenses and legal fees.
Loss of Income Coverage
Loss of rental income coverage is helpful if tenants are forced to move out if your property suffers a covered loss. Suppose a fire, hurricane, or other covered peril renders your property uninhabitable and causes your tenants to move out. In that case, loss of income coverage can cover the missed rent payments you would incur while your tenants are gone.
Types of Rental Property Insurance in New Jersey
Now that you know what coverages you can get as part of your landlord insurance in New Jersey, know that not every policy will have all these coverages. There are three types of rental property insurance policies that cover you in different ways.
DP-1 Insurance Policy in New Jersey
Landlord insurance plans are officially known as Dwelling Policy (DP) forms. A DP-1 is the most basic type of landlord insurance. It covers very few sources of damage, called perils, with the most important being fire and wind damage. DP-1s don’t cover theft, vandalism, snow, or water damage. They also only pay out on an actual cash value basis, meaning your insurer will deduct depreciation from everything before reimbursing you during a claim.
DP-2 Insurance Policy in New Jersey
A DP-2 policy covers more perils than a DP-1, such as theft, vandalism, water damage, snow damage, and falling objects (like trees). A DP-2 also usually covers property at replacement cost while valuing personal belongings at actual cash value.
DP-3 Insurance Policy in New Jersey
DP-3s offer the most protection from perils and payout on a replacement cost basis. DP-3 policies may include liability coverage by default, while you’ll likely have to pay extra to add it to a DP-1 or DP-2. DP-3s are the most comprehensive, so they’re also the most expensive.
How to Get the Best Landlord Insurance in New Jersey
To find the best landlord insurance in New Jersey, you’ll need to compare options from several companies. Providers have different ways of calculating premiums and deductibles, packaging policies, and handling claims. You don’t want to settle for the first quote you get.
Many homeowners insurance companies also offer residential landlord insurance policies, and there are over 60 insurers currently writing homeowners insurance in the state. Insurance companies want your business. You should be able to find one with the coverage you need at the price you want.
You can start by comparing large, well-known insurance providers, but be sure to include smaller, regional carriers with different underwriting methods and customer service as well.
For further starting point ideas, you can ask friends, neighbors, and relatives for their suggestions on the best landlord insurance policy in New Jersey. You can also consult an independent insurance agent whose job is to help compare policies and find coverage.
Clovered is an independent insurance agency with experience handling property insurance in several states in the south and northeast, including New Jersey. We’ve helped over 30,000 people find coverage, and one of our licensed agents would be happy to help you with a New Jersey landlord insurance quote.
Companies With the Cheapest Landlord Insurance in New Jersey
Cumberland Mutual and New Jersey Manufacturers (NJM), two providers headquartered in the state, offer some of the cheapest landlord insurance in New Jersey. Their average rates were over $200 cheaper per year than the next closest option.
There are dozens of insurers in New Jersey who write landlord insurance. Take a look at the average rates from some of the top providers in the state.
New Jersey Landlord Insurance Rates by Company for a $300,000 House
It’s encouraging news that you may be able to find rental property insurance in New Jersey for under $1,000 per year. This is often unattainable in many of the more southern states on the Atlantic coast.
The premiums from the above companies varied by up to $722, so you can see how shopping around is essential for finding the best plan. Remember that your premium could be higher or lower than these numbers depending on your location and other factors. Don’t rule anyone out right away before getting a quote.
What to Know About Landlord Insurance in Edison, New Jersey
Edison is a popular township in New Jersey for rental properties. It has been one of the fastest-growing municipalities in the state for several years, so renting has been widespread. Landlords need the right landlord insurance in Edison.
With home values rising in Edison, landlords need to maintain appropriate property coverage. You should revisit your policy periodically to adjust for changes in property value. For instance, if you’ve done any renovations that would change the replacement cost of your rental, they should be reflected in your plan.
You could also add endorsements like inflation guards or ordinance or law coverage to account for increased building costs. If you believe you’re paying too much for landlord insurance in Edison, you shouldn’t hesitate to shop around.
Factors Affecting Rental Property Insurance in New Jersey
Insurance companies stay in business by managing the risk of the policyholders they take on. If they pay out too many claims, they won’t make money to survive. Thus, underwriting is extremely important to all insurers.
Every company looks at various factors to determine an appropriate landlord premium. Some of the most significant variables they consider are:
- Dwelling type
- Dwelling age
- Dwelling features
- Claims history
An insurer will need to know what type of rental property they’re insuring. Generally, single-family homes will have lower premiums than a building of units or a fourplex. Fewer tenants are in a single-family home, thus creating a smaller liability risk. Also, bigger buildings just need more insurance to cover their structures, so larger houses with more tenants will always need more multi-family home insurance in New Jersey.
Older places are more likely to have issues that lead to claims, such as leaky roofs, worn siding, or outdated piping. Insurers are wary of these potential issues and may charge higher premiums on older properties to offset this risk.
Some smaller features of rental properties can drive up premiums, too. Having a pool, trampoline, or other “attractive nuisance” increases the liability risk of your home. Also, having a wood stove or furnace as a heat source exposes your home to more significant fire risks, which can increase rates.
Companies will also look at the claims history of you and your property before issuing a policy. A property with a history of spawning claims is a red flag. Additionally, a policyholder who has filed several claims in the recent past may be subject to higher premiums.
Is Landlord Insurance Required in New Jersey?
Landlord insurance isn’t required by law in New Jersey, but you’ll likely be obligated to have a policy if you’ve got a mortgage on your rental property. Lenders require insurance coverage when they give home loans.
The only insurance coverage required by law is auto insurance. Otherwise, you aren’t required to get rental property insurance in New Jersey, but that doesn’t mean people forego it. Most property owners have mortgages, and mortgage lenders require you to have insurance to protect their investment in your property.
Many landlords live in one part of a dwelling while renting out other parts, such as duplexes, fourplexes, or small apartment buildings. In this case, a homeowners insurance policy wouldn’t sufficiently cover you due to the other tenants on the property. So, you’d need landlord insurance to be protected.
Landlords renting out a second or vacation home also need coverage, although for a different reason. You can’t get homeowners insurance on a place you don’t live, so your only option is a type of landlord insurance.
These scenarios differ from someone who owns rental properties through a business or company. This person would need to get a type of commercial insurance policy different from the residential landlord plans we’re discussing here.
How to Get New Jersey Landlord Insurance Quotes
There’s a lot to keep track of when getting New Jersey landlord insurance quotes. Doing your due diligence means comparing prices from several carriers.
You've worked hard to buy your rental property. Protect it with a custom policy at an affordable price.
The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.