Is it a post code lottery when it comes to insurance?

While most homeowners realise the value of a good home insurance policy, it is doubtful that many know how much the premiums of a policy depend on the geographical situation their home is in.

Riot torn London and Channel Island haven come out best

According to a recent report by a well known home insurance comparison site the difference in an identical policy from one area of the UK to another is staggering. In many cases the differences in prices are also very hard to understand. For example the report, which uses post codes to glean the information, compares 2011 prices with those in 2010. The three post codes that have benefited most by seeing a decrease in policy premiums are; JE, the post code for the Channel Island of Jersey, London SE, a post code in South East London, and London EC, a post code in East London. Not much difference there!

From top to bottom in a few miles

One can understand that perhaps a small island in the middle of the English Channel will have a small crime rate, an older, wealthy population and a comparatively temperate climate, although it did have its fair share of snow last winter. So it’s not a surprise to see it at the top of the list. That is of course until you look at the post code at the other end of the list, the one that has seen the biggest increase in premiums over the last 12 months. Believe it or not the post code at the bottom of the list is GY, the post code for Jersey’s nearest island neighbour Guernsey!

Massive difference

While residents of Jersey have seen an average decrease in the cost of their household insurance by 12%, those across the water in Guernsey have seen theirs rise by an incredible 32%. Talk about a post code lottery! To further confuse the issue two other island communities, Kirkwall in Orkney and Lerwick further north in Shetland fare badly as well. It may well be that Kirkwall and Lerwick do tend to suffer from more inclement weather but one cannot imagine either being a crime hotspot.

There seems little householders can do in areas where premiums are high, except for grin and bear it or of course move house. However, it does seem insurance providers could do more to justify their pricing.




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