Turning up the heat on insurance hotspots

How much does your home insurance cost? Well, hang on to your hat. It might be worth moving, as recent research from moneysupermarket.com has shown a 391 per cent difference between the most and least expensive insurance areas. The price comparison site looked at average premiums for 2006 for a three bedroom house with no contents limit and no age limit.

Unsurprisingly, Westminster was the most expensive area for home insurance. At £903 a year, it is 63 per cent more expensive than the next most expensive area, which is Hull at £552 a year and 391 per cent more expensive than Shropshire, the least expensive area for home insurance in the survey at £185 a year. 

With insurers loading premiums in big cities, the gap between London, Hull and Grimsby at the top end and Shropshire, Devon and Pembrokeshire at the bottom is likely to widen. High risk areas mean bigger premiums, whether the risk is from crime, flooding or subsidence. The more likely you are to be robbed or burgled, the higher the premiums are likely to be, though even people in a relatively crime free but well off area might have high premiums because of the cost of rebuilding the property.

There are also big differences in car insurance, with insurers looking at factors such as the age of the driver, the type of car, the rate of car crime and whether drivers are prone to accidents to decide on premiums. A woman aged between 45 and 55 driving a Ford Focus could be insured for £145 a year in York, but would have to pay £2,634 a year in Liverpool.

Moneysupermarket has called on insurers to assess premiums on a case by case basis rather than blacklist whole cities and postcode areas. In the meantime, consumers could save by shopping around, as every insurer takes a different approach to calculating risk.