Britain’s Postcode Lottery for Home Insurance

Homeowners across Britain are experiencing differences to their home insurance premiums and it all seems to be based upon which postcode you live in.

Data from MoneySupermarket.com’s Home Insurance Monitor, compiling nearly 3 million home insurance quotes from summer 2010 to spring 2011 has found which areas are the biggest winners and which areas are the biggest losers when it come to home insurance premiums.

 Homeowners lucky enough to live in Jersey, South and East London and Norwich are enjoying the biggest reduction in their premium costs. Jersey saw the biggest reductions with their premiums being cut by 13% followed by South and East London with both areas enjoying a 7% reduction and Norwich 6%.

But why are these areas experiencing such decreases when other areas of the UK are having their home insurance premiums increased?

Julie Fisher, head of home insurance at MoneySupermarket.com explains: Our research shows some areas have seen more of a decrease in the cost of their premiums than others. Unfortunately, postcodes can dramatically affect how much people pay for their home insurance premium. For example in Jersey, one fifth of the population is retired, and low crime rates coupled with mild weather conditions means that the cost and frequency of claims are likely to be lower than other areas of the country. East London is undergoing significant regeneration and infrastructure improvements and insurers may be adjusting premiums as a result.”

Here is a table to show the 10 postcodes which saw the biggest decrease to their home insurance costs:

Data sourced by MoneySupermarket.com

In contrast some areas are experiencing a large rise in their premiums, with Jersey’s Channel Island neighbours, Guernsey experiencing the biggest rise of 32% with Orkney and the Shetland Islands following with 21% and 20% respectively. But what, you might ask, are the reasons for this? Julie Fisher continues “In the case of Guernsey, Orkney and The Shetland Islands, home insurance cover in Summer 2010 was lower than the national average premium price. It is likely that insurers have brought these prices in line with the rest of the country, rather than responding to any specific ‘occurrences’ on these islands, although climate may play a part.

Other areas that experienced an increase to their home insurance include Llandrindod Wells, Stevenage and St Albans, Julie Fisher explains possible reasons for these increases “If your property is classified as being in a ‘high-risk’ area – whether for crime, flooding or even fraudulent claims – it will be reflected in your home insurance premiums. Living in a more affluent area will also increase premiums as property and contents values will generally be higher. Insurers use postcodes as a part of the overall risk factors when calculating premiums. Although there is very little you can do about the postcode in which you live, except move house, there are steps you can take to reduce your premiums, such as, installing a good home security system and security lighting.”

Here is a table to show the 10 postcodes which saw the biggest increase to their home insurance costs:

 

 

photo credit: LulaTaHula