If the wrong postcode puts insurance through the reach

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When he explained the flats were virtually identical, the operator blamed the value hike with their new postcode. “It may be because of the revolutionary Westfield shopping centre, that’s attracted petty crime, but we do not be sure.” David and Laura have decided to take their chances and do without contents insurance.

James Walker, founding father of consumer rights platform Resolver.co.uk, argues that postcodes are a random technique of setting insurance costs. “It is unfair to remain penalised simply because of your geographical area.” The risk is the fact that lots of people are priced away from cover. “If, say, somebody is burgled, the expense of replacing their possessions is going to hit them hard,” Walker says.

Steve Chelton, product expert at Swinton Insurance, says additional factors affect your home insurance costs, along with postcodes: “Age, occupation, claims history, property type and contents value have the ability to a positive change.”

He says there are actions to take down premium besides relocating, for example installing a burglar alarm and five-lever mortice door locks and two-bolt window locks, and joining any nearby Neighbourhood Watch.

Flood damage

Living in the flood-prone postcode often times will be getting household insurance plans are a stormy affair. Around one in six homes in Wales and england are in danger of flooding, with last winter’s storms Desmond, Eva and Frank costing insurers 1.3bn in one payemnt – around 50,000 per home, based on the Association of British Insurers.

Retired couple Keith and Pam Dawson of Hemel Hempstead, Hertfordshire, struggled for getting buildings and contents insurance after suffering 60,000 of flood damage in February 2014. “This was despite subsequently constructing a new perimeter wall and executing other risk improvement are employed at your own expense,” Keith Dawson says.

Mainstream insurers either turned them down flat or would only offer cover with flood exclusion. The pair contacted specialist broker Fairweather Insurance, which negotiated cover costing 633 a year having a 10,000 excess on any claims.

Kevin Roberts, broker and affinity director at Legal & General, says increasingly “granular” insurance firm data should allow insurers to risk assess individual houses with greater accuracy.

“Historically it was not a possibility to drill down so precisely and several houses that have been never at risk of flooding were priced identical to those that were almost going to flood.”