UK Home Insurance Articles Swiftcover Home Insurance
search advanced search

Home >> Home Insurance Articles


Are you a victim of the home insurance postcode lottery?

Article by Simon Christopher
Article added: 26/7/2010 - Last updated: -
Rating: 0.00 (0 votes)


home insurance lotteryIt's no secret that different homes pay different premiums for the same level of cover. Here we explain why that is, and what you can do to overcome the issue.

How much difference can a postcode make?

There is a substantial price range depending on where you live. One study found that for a three-bedroom house, prices could range from as little as £184.52 to as much as £903.81: almost five times as much.

That said, it's worth nothing that the range of prices depends on whether you are looking at policies people have actually taken out, or the premiums on offer for a hypothetical home. The difference is down to the level of cover: often people in areas more at risk of theft will have less expensive possessions so require lower cover limits, while people in relatively safe areas may need higher cover. These effects somewhat reduce the effect of the postcode lottery, but certainly don't eliminate it.

Is the phrase "postcode lottery" really fair?

To a large extent, there's no lottery about it: insurers base their premiums on objective indications of risk such as crime in the area. In many cases, there are perfectly good grounds why insurance should be more expensive in, say, an inner city location compared with a rural village.

Where things get less fair is in places where crime doesn't follow a distinct pattern and "good" and "bad" areas are mixed in with one another: this is particularly common in cities. In these situations people may feel very aggrieved if they face higher premiums than people who live as close as the next street but come under a different postcode.

Is crime the only factor?

Premium variations are also subject to environmental factors. While fortunately most Brits don't have to worry seriously about the risk of devastating earthquakes or tornados, the potential for flooding can significantly influence premiums. While there are tight restrictions which limit the ability of insurers to refuse cover in at-risk locations, they can and do alter premiums depending on flood risks.

How can I overcome the postcode lottery?

If you are in an area which is genuinely at greater risk of crime, you may have to consider that higher premiums are simply a fact of life. However, depending on the value of your possessions, your assessment of the risks, and how much spare cash you have, you may be able to mitigate the effects.

One option is to put a lower limit on the cover offered by the policy, which will usually mean lower premiums. Think carefully before doing this as many people vastly underestimate the true costs of replacing belongings, particularly in incidents such as a fire which wipe everything out.

Another option is to agree to a higher excess in return for a lower premium. This is inherently a gamble, but if you are able to afford the extra potential losses, and if you are confident the actual risk of theft is lower than the premium suggests, it could make sense.

A third possibility is to take advantage of no-claims discounts. With some insurers offering substantial discounts after a few years, it may work out cheaper to take minor losses such as accidental damage on the chin rather than make a claim.



PLEASE NOTE: The guidance published in this article is for information only and does not constitute financial advice or a recommendation of any particular home insurance policy or company. If you are in any doubt please consult an independent insurance adviser. A database of advisers in your area is available at www.unbiased.co.uk

Copyright UK Insurance Index http://www.uk-insurance-index.co.uk. All rights reserved.


comments about this home insurance article

Comments About this Article:

 Add a Comment


share this home insurance article

Share this Article:



rate this home insurance article

Rate this Article:


Please rate this article between 0 and 5
with 5 being top.
All ratings received for this article.

all categories ALL CATEGORIES
A-Z Categories

popular categories POPULAR CATEGORIES
Car Insurance
Home Insurance
Life Cover
Mobile Phone Cover
Pet Insurance
Travel Insurance

directory categories DIRECTORY CATEGORIES
Business
Event
Health
Home & Property
Insurance Brokers
Life & Protection
Marine
Motor
Non UK Insurers
Pet & Animal
Personal Possessions
Specialist Cover
Sport
Travel

review categories REVIEW CATEGORIES
Business
Car & Motor
Health
Home
Insurance Companies
Life Cover
Motorcycle
Pet & Animal
Possessions
Sport
Travel

article categories ARTICLE CATEGORIES
Business
Car & Motor
General
Health
Home & Property
Insurance Awards
Insurance Guides
Life Cover
Pet & Animal
Travel

news categories NEWS CATEGORIES
Business News
Car and Motor News
General News
Health News
Home & Property News
Life Cover News
Pet and Animal News
Travel News

FEATURED SITES
Churchill Home Insurance
Churchill Home Insurance
Award winning home insurance company with comprehensive features and price guarantee.

Aviva Buildings and Contents Home Insurance
Aviva Home Insurance
Get comprehensive buildings and contents insurance from the UK's biggest insurer.

latest listings LATEST LISTINGS
UKinsuranceNet Home Insurance
Age UK Home Insurance
Protect Your Bubble Home Insurance - 25 cash back*
Policy Expert Home Insurance Comparison
Staysure Home Insurance

latest reviews LATEST REVIEWS
Domestic and General Washing Machine Cover
Key Connect Home Insurance
Warranty Shop Home Appliance Cover
RIAS Contents Cover
Homeserve Boiler Cover

latest articles LATEST ARTICLES
Home insurance complaints what you can learn from others misfortune
What happens when an insurer won't pay your home insurance claim
Home contents insurance - limit your risk with the right cover limit
Are you a victim of the home insurance postcode lottery?
Will a flood leave your home insurance high and dry?



Home | Privacy & Cookies | Terms of Use | Contact | Submit Site | Advertisers

Page protected, do not copy

This website uses cookies to ensure a reliable browsing experience. If you continue to use this website you are consenting to us using cookies in this way. To find out what cookies are, which ones we use and why we use them please click here.

Copyright © 2017 UK Insurance Index. All rights reserved.
All directory listings, articles and reviews are provided as information only and do not constitute advice or a recommendation of any product or provider. If you use these insurers, we take no responsibility and give no guarantees, warranties or representations, implied or otherwise, for the content or accuracy of these third-party web sites or companies. If you have any doubts you should consult an authorised independent financial adviser for advice based upon your individual needs and circumstances. A database of advisers in your area is available at www.unbiased.co.uk.