How Can Your Postcode Affect Your UK Home Insurance Policy?
Introduction
- home insurance is the most standard and easily available form of
property insurance contract and although not
compulsory by statue, anyone with a mortgage will almost certainly be required
to insure the fabric of their home under a
buildings insurance policy. To this, you can at
your option, opt to include cover for contents which in turn can be extended to
include All Risks ( this section of a home insurance policy is designed to cover
valuable items away from the home. But how are insurance rates for home
insurance calculated? When applying for you home insurance uk policy,
there are a number of rating or underwriting factors that an insurer will take
in to consideration before providing you with a quotation. There are quite a few
variables and this makes almost every quotation different. One of the most
important rating factors for home insurance is your postcode....
Postcodes in the United kingdom are
alphanumeric and were introduced by the Royal Mail to help identify United
Kingdom homes over a 15 year period between 1959 to 1974, however major cities
had been using postcodes as a means of identifying locations from as long ago as
1857. The first system of ten London postal areas identified by the
letters (W, WC, EC etc) was devised by Sir Rowland Hill and introduced in 1857.
The numbered subdivisions (W1, W2,WC1,EC1 etc) were introduced as a war-time
measure and date from 1917. These 1917 subdivisions became the basis of the
system introduced by the Royal Mail, because they form the first part of the
two-part modern postcode (so W1 1AA is an address in the old London W1 district.
Modern postcodes that are used to pin down exact addresses are made up of
various sections, the following example postcode SW1A 1AA, is for Buckingham
Palace in London. In this example, the first pair of letter represents the area,
the following digit represents the district within that area and the remaining
letters and numbers pin the location down to a sector in that area. The part of
the code before the space is the outward code or out code used to direct mail
from one sorting office to the destination sorting office, while the part after
the space is the inward code or in code used to sort the mail into individual
delivery rounds, each separate code usually identifying the address to within 80
properties (with an average of 14 properties per postal code), although a large
business building may have a unique postcode.
It is a pure hierarchical system, working from left to right with each postcode
generally representing a street, part of a street, or a single premises. So this
system that was originally introduced as a means of helping postmen locate
homes, now plays a major parting in the rating of home Insurance. All insurance
companies keep a database of statistical information relating to postcodes, from
it they can discover various information that will all affect insurance pricing.
1) Insurers can tell the type of soil that you property stands, on
this helps them decide if you home is likely to be troubled by
subsidence, for example if the postcode
indicates that your home is built on clay soils, the insurance company may want
an increased premium. They will also be able to tell if you home is situated
above mine workings or tunnelling.
2) Insurers can tell if you
property is situated on a flood plain or close
to any rivers or water courses. Insurers also make use of sophisticated mapping
software and can often overlay maps to see the extent of any flood water and its
proximity to your home. With the rent spate of bad weather claims, insurers are
currently updated the postcode flood map and this data will help them decide of
future home insurance premiums and may even decide if insurance is available or
not.
3) Insurers will have access to previous claims information for your postcode,
this is now so fine tuned that sometimes insurance rates can vary from street to
street. Insurers will be able to tell if they have experienced previous claims
in your neighbourhood, in particular they will be looking out for Theft and
malicious damage occurrences.
back
to top
Copyright Assetsure Limited
2007
`
