One of the name of factors in determining the price of UK property insurance for customers in the UK is the postcode in which the property is located. It is so easy for underwriters and insurance companies to analyse risk factors are postcode due to the overwhelming use of computer technology and market databases. Data can be sorted into various risks such as burglary, storm damage, floods and subsistence. It is quite normal now for some insurers to exclude prospective customers from even applying for insurance products based on their post code because statistical analysis are shown but these postcodes will provide a bad risk and hence lose the company money.
Flooding Postcodes - the recent floods in the United Kingdom have clearly shown postcodes where flood plains exist and the enormous damage that has reinforced underwriters attitude towards risk in specific high risk areas. If you live on the edge of the postcode area you may be paying for more than a neighbour that lives in a different postcode just across the road. This may seem somewhat unfair to the lay person, however insurers have to use some form of numerical analysis and dividing lines to mitigate risk. In the UK, there are over two million properties that are situated on the flood plain. Parts of the summer of 2007 caused over two billion pounds worth of damage largely in those areas. It is probable that in the future these areas will face higher insurance premiums. Even though specific property postcodes may not be targeted with price rises, the national scale of the flooding is likely to push up prices generally for everybody in future.
Burglary Postcodes - a recent study by Endsleigh showed that if you live in Nottingham you're more likely to be burgled than other areas in rest of the UK. The least likely area to be burgled is in Guildford in Surrey. This example came form a study that analysed insurance claims from customers during the last four years.
