Car insurance and your postcode: how your address affects your 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.

Car insurance and postcodes: the data insurers look at

There are lots of different bits of information about your postcode insurers will look at when working out your car insurance price.

That includes:

  • How many people live there
  • How much traffic there is
  • Crime rates (vehicle thefts and damage)
  • How many claims are made in the area
  • Number of incidents in the area
  • Road systems (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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It's how you store the car, not just where you live

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

If you keep the car in a garage, or 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.

How postcodes are "rated" for car insurance

In the same way that different vehicles are put in different "groups" for insurance purposes, postcodes are lumped into different bands. Insurers have their own way of grouping postcodes - there's no one system that everyone uses.

That means the cheapest postcode for car insurance varies 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. And some insurers might consider a postcode "low-risk", and others might consider 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.

Make sure you check your policy documents to see all the details.

How dual postcodes affect your car insurance

We wish our lives were exciting enough to have two postcodes. But it can cause a few headaches when it comes to your car insurance.

For the students who split their time between uni accommodation and home, or the high-flying professionals who stay at a different address in the week, 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.

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 should let your insurance company know when you move to a new address. If you don't, your insurance might not be valid.

Changing your address can affect the price of your car insurance. But not always in the way you'd expect. If you're keeping your car on a driveway or in a garage at your new address, your car insurance might even get cheaper, even if you're moving to a "riskier" postcode.

And don't forget all the other life admin stuff. Make sure you update your log book (or V5C certificate, if we're being proper) 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 short-term car insurance, your price will probably also be affected by where you are when you start the policy - not just where you live.

And our monthly subscription car insurance uses your address to figure out your price. Along with details about where you park the car at night.

And some temporary car insurance companies won't always use your home address at all to figure out your price.

(That's how we usually do things at Cuvva. When you buy a policy, you can send us your current location through the app. We'll use that data to help work out the price of your policy.)

Updated on 5th May 2021