Home insurance: what’s happening to prices where YOU live?

The typical cost of home insurance has fallen by 5.4% since last autumn, according to the MoneySupermarket home insurance monitor.

And for some people, premiums have plunged by a lot more than that.

In certain parts of the country, households can expect to pay a massive 11% less for their home cover now than they did this time last year.

But despite the average annual premium dropping to just £146, our analysis of more than 3.3 million quotes indicates that not all Britons will pay less to insure their homes this year.

For those living in 10 different UK postcodes, nine of which are in Greater London, premiums have actually risen by up to 10%.

Hannah Jones, home insurance expert at MoneySupermarket, said: “Although the overall picture shows the cost of home insurance coming down, some households have seen quite substantial increases.”

Reasons for this include the affluence of the areas involved – properties in wealthier areas tend to be worth more and have house contents of greater value – as well as insurers deciding they are at greater risk of crime or flooding.

Here, we take an in-depth look at the figures to find out how this home insurance postcode lottery affects you.

What’s happening in my area?

The MoneySupermarket figures show that, over the 12 months to August 31, 2012, combined buildings and contents insurance premiums fell by an average of 8.4%, while stand-alone contents insurance premiums dropped 14.8% and standalone buildings cover slipped 2.6%.

Top ten postcodes with the largest DECREASES to the cost of home insurance:

 Postcode District  Post Area  % Decrease  £ Decrease
 TD  Galashiels  -11.5%  -£15.44
 SR  Sunderland  -11.3%  -£17.14
 KY  Kirkcaldy  -11.0%  -£16.32
 WR  Worcester  -11.0%  -£15.89
 FY  Blackpool  -11.0%  -£18.78
 LA  Lancaster  -10.1%  -£15.10
 NE  Newcastle upon Tyne  -9.9%  -£14.17
 ST  Stoke-on-Trent  -9.8%  -£14.17
 DY  Dudley  -9.8%  -£13.66
 NR  Norwich  -9.5%  -£12.15

Residents of the Scottish border town of Galashiels benefited the most, with an incredible 11.5% drop.

They are not the only ones able to take advantage of a larger-than-average decrease, though.

People living in Sunderland, Kirkcaldy, Worcester and Blackpool should all be able to get home insurance 11% more cheaply now than they could last autumn.

And those with homes in Lancaster, Newcastle upon Tyne, Stoke-on-Trent, Dudley and Norwich can all look forward to paying between £12 and £15 less a year for cover when they come to renew their policies after shopping around for the cheapest deal.

For Londoners, however, it is a very different story. Those with postcodes starting EC – most of which are based in the City of London – can expect to pay 10.1%, or around £15, more for their home insurance.

The ten postcodes registering an INCREASE to the cost of home insurance:

 Postcode District  Post Area  % Increase  £ Increase
 EC  London EC  10.1%  £14.83
 SW  London SW  9.4%  £14.82
 N  London N  8.8%  £15.46
 NW  London NW  7.5%  £13.12
 SE  London SE  6.8%  £11.24
 E  London E  6.3%  £10.12
 W  London W  5.7%  £9.18
 WC  London WC  3.9%  £4.86
 UB  Southall  0.6%  £1.13
 BT  Northern Ireland  0.4%  £0.57

Traditionally a financial services and business district, this has a growing residential population, with many wealthy people moving into apartment blocks built by the Thames. Insurers are clearly adjusting their prices to take account of this trend.

Those living in South West London, North London and North West London will face annual increases of between 9.4% and 7.5%.
Other parts of the country where premiums have gone up rather than down include Southall (also in Greater London), which registered a 0.6% increase, and Northern Ireland, where typical premiums have risen 0.4%.

Why have prices come down in some areas and risen in others?

The average house price in your area is one of the factors that decides your home insurance premium.
The higher it is, the higher the price you will pay for cover.

The relative strength of the housing market in the capital – in comparison to other parts of the country – may therefore be one reason insurance costs have risen for Londoners.

Jones said: “Living in a more affluent area can add to the cost of a premium, mainly because the value of the property and the contents will generally be higher. This may be why premiums have gone up in London, as property prices have bucked the downward trend felt by other regions of the UK.”

If your property is classified as being in a ‘high-risk’ area – whether for crime, flooding or even fraudulent claims – the cost of your home insurance will also rise.

A spate of burglaries or flood claims in the local area could therefore push up your premiums, even if you are not affected.

Jones said: “As the tables show, the findings of our research show that the postcode you live in can dramatically affect how much you pay for your home insurance.” 

How can I keep home insurance costs down?

You can’t do much about the impact your postcode has on your home insurance premiums, apart from moving house, of course.

However, there are steps we can all take to keep home cover costs down – wherever we live.

You can, for example, slash your premiums by fitting insurer-approved window and door locks, joining a Neighbourhood Watch scheme and investing in a decent alarm or home security system.

To minimise the risk of having to make a claim due to fire or flooding, meanwhile, you can install smoke alarms and pipe and tank insulation that prevents winter freezing.

However, whether premiums have gone up or down where you live, the best way to ensure you get the best possible deal on your buildings and contents cover is to shop around.

And the good news is that finding the best combination of cover and price does not have to be a chore if you let a comparison website such as MoneySupermarket do the legwork for you.

Hannah said: “Finding the best deal on home insurance is quick and easy to do and the average annual saving made by those using MoneySupermarket is £126.”

We also have a number of exclusive deals with home insurance providers that can add icing to the cake once you’ve found the right deal for your circumstances.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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