Car insurance and postcodes: how your address affects your premium price

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Car insurance and your postcode
Storing your car
Postcode ratings
Dual postcodes
Changing your address

Your postcode is one of the many things that can affect the price of your car insurance.

If you're on the hunt for a new home and trying to make every penny count, you should choose carefully. Living in one postcode over another could cost you hundreds or even thousands of pounds more per year on your car insurance.

Here's our top tips on how to save money when choosing a new home 🏡

Car insurance and postcodes

Insurers look at loads of different bits of information regarding your postcode when working out your car insurance price.

For example:

  • How many people live there
  • How much traffic there is
  • The crime rate (especially vehicle thefts and damage)
  • How many claims are made in the area
  • The number of incidents in the area
  • What the road system is like (cycle lanes, junctions and roundabouts tend to be riskier)

Generally, this means it's more expensive to get car insurance if you live in a big city than if you live in the country.

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Where you park your car

As well as the postcode you live in, insurers will base your insurance price on where you keep your car overnight.

If you keep the car in a garage, or even on a drive, you might get a much cheaper policy than if you leave it on the side of the road.

Even if you were moving house from a "low-risk" postcode to a "high-risk" postcode, you still might get a cheaper policy if you'll be keeping your car in a garage overnight at your new address, rather than on the road.

So don't just focus on postcode when chosing a new home - also consider where you'll be able to park your car.

Your postcode massively impacts how much you pay for your car insurance
Your postcode massively impacts how much you pay for your car insurance

Car insurance postcode ratings

In the same way that different vehicles are put in different "groups" for insurance purposes, postcodes are also sorted into different bands.

Different insurers have their own ways of grouping postcodes - there's no one system that everyone uses. That means the cheapest postcode for you could vary depending on who your insurance is with.

Some postcode groupings go from A to F. "A" postcodes are the lowest risk. "F" postcodes are the highest risk. Others might go from A to W. It varies a lot.

Some insurers might also consider a postcode "low-risk" while another considers it "high-risk".

Some postcodes are given a "Refer" rating. That means you have to check with your insurer to see how it will affect your price.

Some insurers will set specific conditions if your postcode is in one of the riskier postcodes. So if your insurer uses an A-F grouping, and you live in a D, E or F-rated postcode, you might have to keep your vehicle in a locked garage when you're at home, for example.

With so many variables, make sure you check your policy documents or talk to your insurer.

How dual postcodes affect your car insurance

Some drivers have two postcodes: for example, students who split their time between uni accommodation and home, or the high-flying professionals who stay at a different address in the week.

In this case, it's not always clear which address is the "main one". If you have more than one address, you should get in touch with your insurer. They will help you figure out which address you should put down when you buy your policy.

But before you contact them, it's worth running two different quotes: one with each address. That way, you'll know which postcode would get you a cheaper policy, and you can ask your insurer if it's okay for you to put that one.

Where you park your car can impact your car insurance
Where you park your car can impact your car insurance

However, watch out: putting the wrong postcode can mean your insurance isn't valid. So you can't use a friend or relative's postcode if it's not where you live or store your car.

Even if one address comes out significantly cheaper, you should still make sure you speak to your insurer before putting it down as your main address. If you have to make a claim, your insurer might claim that you used a misleading address.

It's also worth chatting to them if you keep your car in a different postcode to the one you live in. Those situations can get pretty confusing, too.

Most of the time, there won't be any problem having your paperwork sent to a different address than the one you put down as your address for car insurance purposes - as long as your insurer agrees to it.

Changing your address

You always need to let your insurer know if there are changes to your personal details, including your address.

As we discussed earlier, this could impact your price. There's other more boring stuff to consider, too, like updating your log book or V5C certificate and your driver's licence.

You don't have to tell your insurer about a temporary change of address. It's only if you're moving permanently.

How your location affects temporary car insurance

If you're buying Cuvva's short-term car insurance, your price will probably be affected by where you are when you start the policy - not just where you live.

You can get a quote in minutes. Happy driving! 🚗

Updated on 3rd April 2023