A nationwide survey conducted by the AA found that home insurance premiums could differ by 300% depending on where you live. As people who live in areas such as West Norwood in South East London, Bacup in Lancashire and Anfield in Liverpool pay up to around three times as much for their buildings and contents insurance than those who live in areas such as Aberdeenshire, and Barnstable.
Insurers usually rate each area according to a list of risk factors. Burglaries cost insurers the most over the average year, but floods, subsidence and storm damage are also significant in setting local premiums.
An underwriting director for an insurance company, said that:
“Different postcodes can present bad risks for different reasons. One home might be in a crime hotspot, another in a rural area might be near to a river and subject to a flood risk.
“It is up to the insurer to assess how these factors inter-act using data such as crime figures and flood maps.”
Even if you do not live in a crime spot, that does not give you a guarantee of low premiums. Insurance is also expensive in rural areas such as Wisbech in Cambridgeshire and Highbridge, Somerset, because of the risk of flooding being the major factor. Also parts of south London come up as the UK's most expensive to insure because of there being a huge amount of above-average subsidence claims, crime and flood risk.
Homeowners can take steps to cut down the cost of premiums. For example, always shop around when it is time for renewal and compare your present insurer against the others out on the market.
Also volunteering for a higher excess which is the portion of a claim you pay could reduce your overall premiums. And many insurers reward their customers with no-claims discounts of up to 30%. This means it can pay to think twice before lodging a claim for minor losses, such as accidental damage. You can also take steps to reduce the impact of potential floods.
Also if you tell your insurer everything you plan to do in order to reduce risks of any sort of damage it could help to put you in the best possible light which could help to make sure you get a good deal.
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