residents are no stranger to the devastation of a natural disaster. 2012 Hurricane Sandy left 2 million residents without power, destroyed 346,000 homes, and caused $1 billion in damages. In a state prone to floods, droughts, and severe storms, homeowners insurance is a necessity.

However, research completed in 2016 by the

Insurance Information Institute

revealed that homeowners across the country are incorrect in their understanding of what their insurance policy actually covers. With 28% of homeowners believing that their insurance policy will cover flood damages caused by a hurricane, many residents have been left without insurance protection when disaster strikes.

Knowing how you will be protected and getting additional coverage when necessary may save you from the financial aftershocks of disaster. The

car

and home insurance super app

Jerry

is covering everything you need to know about natural disasters and home insurance in New Jersey—continue reading to learn more.

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What is homeowners insurance—and what does it cover?

A homeowners insurance policy covers losses and damages to an individual’s residence and may vary in terms of the level of coverage and the specific perils covered.

Most policies will include personal property coverage, loss of use coverage, liability coverage, medical payment to others, and additional living expenses.

Levels of homeowners insurance coverage

HO-1: An HO-1 policy covers your primary dwelling from a limited number of named perils (problems), such as fire, lightning, and hail. This policy is typically the least expensive option and does not cover personal property, loss of use, or liability.

HO-2: An HO-2 policy covers damage to your home and personal property from the named perils listed on your policy.

HO-3: An HO-3 is the standard policy and the most common type of coverage. This policy covers the main structure, additional structures, personal property, loss of use, liability, and medical payments. An HO-3 policy is an open perils policy, meaning that it will cover any peril unless otherwise stated on the policy.

HO-5: An HO-5 policy is also an open perils policy that covers both your home and personal property. While this policy is the most comprehensive option, it is also the most expensive.

Consider your options by reviewing the table below:

Policy type	What’s covered	Open perils?
HO-1	Main structure only	Named perils only
HO-2	Main structure, personal property, loss of use, liability, medical payments	Named perils only
HO-3	Main structure, personal property, loss of use, liability, medical payments	Main structure - open perils, personal property - listed perils only
HO-5	Main structure, personal property, loss of use, liability, medical payments	Yes

MORE:

Home insurance terms you need to know

What perils are covered by homeowners insurance?

If you live in a high-risk state like New Jersey, it's important to know which perils are covered by your policy.

Named insurance policies, or HO-1, HO-2, or HO-3 policies, typically cover the following 16 named perils:

Fire and lightning

Smoke

Volcanic eruption

Explosion

Riot or civil commotion

Hail and windstorms

Damage caused by vehicles

Damage caused by aircraft

Vandalism

Theft or malicious mischief

Falling objects (not usually covered by HO-1)

Weight of snow, ice, or sleet (not usually covered by HO-1)

Water overflow or discharge from plumbing (not usually covered by HO-1)

Water heater cracking (not usually covered by HO-1)

Damage from electrical current (not usually covered by HO-1)

Frozen pipes (not usually covered by HO-1)

Note that the two most common natural disasters in the United State, floods and earthquakes, are not covered by homeowners insurance!

Key Takeaway Your homeowners insurance coverage is determined by the type of policy you have and the precise perils listed on it.

Does home insurance cover natural disasters in New Jersey?

Between 1953 and 2019, New Jersey has experienced 51 natural disasters, including hurricanes, floods, winter storms, wildfires, extreme heat, landslides, power outages, tornadoes, and tsunamis. Of the many declared disasters in New Jersey, severe storms and hurricanes have been the most frequent.

In the event of a natural disaster, will your homeowners insurance policy protect you from damages?

Let’s explore which of these common New Jersey disasters are covered by your insurance, and which are not.

Hurricanes

In 2011, New Jersey was victim to six declared severe storms and hurricanes, one of which caused $1 billion in damages. In addition, devastation from Hurricane Sandy in 2012 continued to impact homeowners for years after the disaster had occurred.

Unfortunately for New Jersey homeowners, damages caused by hurricanes are not covered by regular insurance policies. While hail and windstorm damages are accounted for in the 16 named perils, homeowners need to buy additional coverage for damages specific to hurricanes.

MORE:

Does car insurance cover hurricane damage?

Wildfires

New Jersey residents are vulnerable to wildfires, particularly across the 1.1 million-acre tract known as the Pinelands. Numerous small fires occur throughout the year and put millions of homeowners in danger.

Luckily, every homeowners insurance policy, from an HO-1 to an HO-5, will cover the damages caused by a fire.

Severe storms

The Garden State’s 130 miles of coastline, warm ocean waters, and tropical air combine to create the perfect storm for destruction. Dangerous thunder and lightning storms, extreme winds, and heavy rainfall are typical of the region.

New Jersey’s mean elevation of 250 feet also makes the state susceptible to flooding, with inland regions of the state increasingly at risk. Residents are encouraged to be prepared for such an event with an evacuation kit.

Residents can also prepare by purchasing their own flood insurance through the National Flood Insurance Program. Damages from flooding are not covered by regular insurance, and financial assistance from the federal government is a limited resource.

Earthquakes

With several fault lines throughout the state, New Jersey is vulnerable to earthquakes. While previous earthquakes have only caused minor damages, the increasing population size may lead to more damaging shakes in the future.

To further exacerbate the risk, many older buildings throughout the state were not retrofitted to withstand earthquake activity, and experts believe that a 5.5 Magnitude earthquake could topple buildings.

Despite the impending risk, earthquake insurance is not covered in your regular policy and will need to be purchased separately. Earthquake insurance will typically have its own deductible (10-25% of the dwelling’s policy limit) and cover your dwelling, other structures, personal property, and additional expenses.

Winter Storms

New Jersey residents can expect chilly temperatures and heavy snowfalls throughout the winter season, with January and February bringing the coldest days of the year.

Blizzards, ice storms, and extreme winds may also blow in, such was the case with the New Jersey Blizzard of 2016. The storm lasted for several days and brought with it blistering cold winds and record-breaking levels of snow.

The winter season in New Jersey is reason enough for homeowners to be covered with insurance, as most policies will cover frozen pipes, water damage, and damages caused by the weight of snow, ice, or sleet on a roof.

MORE:

Everything you need in a winter emergency car kit to keep you safe

Key takeaway New Jersey home insurance will cover damages from wildfires, severe storms, and winter storms, but homeowners should buy additional coverage for earthquake, flooding, and hurricane damage.

How to file a home insurance claim

Having an insurance policy to cover any losses or damages can protect you, but only so long as you understand how to submit a claim when such damages occur.

To strengthen your protective shield, review the steps to submit an insurance claim:

Document your losses by creating an inventory of damages and taking photographic evidence

Contact your insurance company and inform them of what has occurred. They will assign you to an insurance adjuster, to whom you can submit your claim

Determine the value of your damaged/lost items

Fill out the necessary paperwork provided by your insurance company

Review the damages with your adjuster

Receive quotes from multiple contractors to ensure you’re given an equitable settlement

Collect your funds and begin to repair your home

How to save money on homeowners and car insurance

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