Why home insurance is all about location ?

Location, location, location is the motto of house-buyers up and down the country in search of a good value property to make their own. Being situated in a rural suburb close to the big cities offering a quiet retreat and yet low travel costs for commuters is seen as ideal for property hunters. However, the importance of location does not end there. It’s also vitally important after you buy your home too – thanks to the hike in home insurance costs you could face based on where you live. A study by EMB, the actuarial consultancy, has labeled the London borough of Isling ton as the most expensive area in the UK in which to insure possessions. However, what makes one area more expensive than the other and which other towns face sky-high home insurance costs?

The cheapest and most expensive areas for home insurance

According to analysis of quotes carried out by a comparison website from January to July 2007, it was actually the London area of West Norwood, with the postcode SE27, that was the most expensive for home insurance in the UK. In fact the capital city and its suburbs dominated the list of the areas with the highest home insurance premiums with the likes of Anerley, East Dulwich, Upper Norwood and Brockley also making the top ten. The most expensive quotes were a whopping 21 per cent higher than those in the most expensive area outside London – Bacup in Lancashire – making the capital city a clear hotspot as far as home insurance providers are concerned. By contrast, the cheapest areas in the UK were predominantly rural – Stonehaven, Kincardineshire, topping the list with an average lowest quote of just £109.69. Other areas that featured in the top ten cheapest list included Cowdenbeath in Fife, Diss in East Anglia and Barnstaple in Devon.

What makes home insurance higher in some areas than others?

Home insurance companies base their quotes on ‘risks’. The higher the risk in one area, the more expensive the quotes will be. There are numerous potential risk factors that home insurance companies evaluate. In particular these include the crime rates in the area. That’s why home insurance quotes tend to be higher in cities by comparison to rural areas because of the combination of high crime and unemployment rates. As EMB highlights, Islington has a high density of unemployed young males – the group deemed most likely to commit crimes against a property.

It’s not just crime that factors into the equation however – insurers will also look at how high the risk is of your home being affected by bad weather and particularly flooding and subsidence. The survey carried out by the comparison website viewed statistics from the first half of 2007 – prior to the summer’s bout of flooding. Both the flooding of 2007 and the storms of early 2008 have had a massive effect on home insurance premiums. Last year’s flooding alone cost insurers around £3billion and those in the worst-affected areas could see premiums leap by as much as 40 per cent.

So what can you do to reduce home insurance costs?

If you’re in the process of buying a home, think carefully about your costs beyond the price tag of the building itself. Look into the crime rates of the area and visit the Environmental Agency website to discover if you could be living in a flood-risk zone. Keep away from the areas at high risk if you want to avoid high home insurance costs.

Of course for many, moving home simply isn’t an option – or you might not want to sacrifice a dream house just because the area has a bad reputation. If this is the case then you should still do as much as you can to reduce your home insurance premiums. For example, if you live in an area constantly under the threat of bad weather then carry out maintenance to your home, keep a stock of sandbags, move plug sockets higher up the walls and attach floor skirts and barriers to the doors to reduce the impact of any flooding. If you’re in a high crime area then fit a house alarm to your home. Consider double-glazing and time-switch lights to cover you if you’re away from the house for a considerable length of time. Ask your home insurance provider if it can recommend any other security devices.

Protect your home and keep your home insurance provider informed. Tell them about any actions you take and they’ll almost certainly reward you with cheap home insurance premiums.