NJ Insurance Costs Rise But Still Lower Than Most

Dated: 12/18/2013

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New Jersey homeowners have seen their insurance bills rise in recent years, but they still were paying less than the national average to protect their properties, according to a new report by the National Association of Insurance Commissioners.The average premium for the most common homeowners policy cost New Jerseyans $915 in 2011, the most recent data available from NAIC, an umbrella group for state insurance regulators.That’s 5.5 percent higher than the $867 homeowners paid on average in 2010, according to the group’s data. But it is still lower than the national average. Across the country, homeowners' premiums averaged $978 in 2011, or 7.5 percent more than what they did in 2010.The NAIC data do not explain why New Jersey, a state with some of the nation’s highest auto and health insurance costs, has stayed below average when it comes to homeowners coverage. But to the state’s insurance regulator, this is a sign of a healthy market."It is good news for consumers that in a high home value state like New Jersey, homeowner’s insurance costs and rate hikes are below the national average," Marshall McKnight, a spokesman for the state Department of Banking and Insurance, said in an email."That indicates a strong, stable market where competition is keeping overall premium costs and rates affordable and below those of other states."McKnight noted that the state currently has 113 companies writing homeowners’ insurance, including eight of top national carriers. He also said enrollment in New Jersey’s Fair Plan, a so-called insurer of last resort, has been dropping steadily over the years, a sign that homeowners are finding coverage in the private market.Christine O’Brien, president of the Insurance Council of New Jersey, a Trenton-based group that represents property and casualty insurers, said New Jersey’s diverse and stable housing market is a plus for carriers while the ability for consumers to shop around has helped keep rates lower.The current NAIC report covers premiums set for 2011, the year that Tropical Storm Irene and a costly October snowstorm inflicted massive insured losses on the Garden State.It won’t be known until next year, when NAIC issues its study on 2012 premiums, how these events impacted overall premiums in New Jersey. But O’Brien said she doesn’t expect they, or even Hurricane Sandy, caused substantial, across-the-board rate hikes on Garden State consumers."Since Sandy, the market has stabilized pretty quickly," she said.Part of what likely is keeping New Jersey rates below the national average are the heavy prices paid in Southern states prone to natural disasters such as hurricanes, tornadoes and drought.Florida had both the highest average premium ($1,933) and the biggest year-over-year gain (25 percent). It was followed Louisiana, with average premiums of $1,672, and Texas, where premiums averaged $1,578.NAIC, however, notes that the Texas premium data are "artificially high" because of the way the state submits its data. Some state premiums also reflect data from the so-called last-resort or high-risk policies.Other top-paying states were Mississippi ($1,409); Oklahoma ($1,386); and Alabama ($1,163), the NAIC data show. The cheapest premiums were in Idaho, where the average homeowner paid $518 in 2011.

Courtesy of: Ed Beeson/The Star-Ledger
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Kim Pileggi

Greetings from Long Beach Island! I am a full time real estate agent specializing in LBI sales and summer rentals, servicing all of LBI and the surrounding mainland communities. I have earned several ....

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