60-second summary
Want a quick lowdown on how postcodes affect car insurance? Here are the key takeaways:
Your postcode is a big influence on the cost of your car insurance.
Living in an area with a high crime or accident rate will push up your car insurance costs.
London postcodes tend to have the highest car insurance premiums.
Quiet rural areas generally have the lowest premiums.
There are ways to lower your car insurance costs, even if you live in a high-risk area.
Why does my postcode affect my car insurance?
When working out the cost of your premium, insurance providers consider all sorts of risk factors to determine the likelihood of you making a claim. One of those factors is where you live.
If claims are more likely in your area, you could be paying as much as hundreds of pounds more than drivers living in neighbourhoods deemed less risky. While we’re not suggesting you relocate just to save on insurance, it’s something to bear in mind if you’re thinking of moving any time soon.
What your postcode tells insurers
Because you do most of your driving close to home, your postcode holds key information for insurance providers on the risks you face as a driver and car owner, including:
The population density where you live
Traffic trends in your local area
Crime rates in your neighbourhood, including theft and vandalism
The number of accidents recorded around your postcode and the number of claims made
If there are any nearby ‘high-risk’ traffic systems, such as roundabouts and cycle lanes
How many uninsured drivers live nearby
If there have been any fraudulent claims made in your neighbourhood.
Car insurance providers use the information on claim numbers and crime rates to rank UK postcodes according to risk. And that risk classification is one element that determines the amount you’ll pay for your car insurance.
Car insurance postcode rankings
Insurance providers group postcodes into six groups from A to F depending on their level of risk. So, postcodes in group A are considered low risk, while those in group F are the highest level of risk.
What postcodes are considered the highest risk?
Insurance providers consider the risk of your car being broken into or stolen when they calculate the price of your insurance premium.
In general, postcodes in urban and inner-city areas are considered a greater risk for insurance providers because they’re more densely populated and experience heavier traffic. The more cars there are on the road, the greater chance there is of an accident.
Urban areas often have higher crime rates too. CrimeRate statistics for 2024 show the areas with the highest vehicle crime rates are London, the West Midlands and Bristol.
Which postcode is the most expensive for car insurance?
According to Compare the Market insurance data in March 2025[1], the UK postal towns with the highest average premiums were:
London borough | Average premium |
|---|---|
1. Tower Hamlets | £1,460 |
2. Newham | £1,438 |
3. Brent | £1,351 |
4. Barking and Dagenham | £1,306 |
5. Westminster | £1,285 |
Outside London, the postal towns with the highest average premiums were:
Postal town | Average premium |
|---|---|
1. Birmingham | £1,189 |
2. Luton | £1,176 |
3. Manchester | £1,175 |
4. Bradford | £1,126 |
5. Sandwell | £1,106 |
[1] For the period March 2025, 51% of people could achieve a quote up to the average premium shown by postal town for comprehensive cover.
What postcodes are considered the lowest risk?
Rural areas tend to be the cheapest postcodes to insure because there aren’t as many people around, there’s less traffic on the roads and often less crime.
Which postcode is cheapest for car insurance?
According to Compare the Market insurance data in March 2025[2], the UK postal towns with the cheapest average premiums were:
Postal town | Average premium |
|---|---|
1. Western Isles of Scotland | £390 |
2. Orkney Islands | £402 |
3. Shetland Islands | £411 |
4. Isles of Scilly | £438 |
5. Isle of Wight | £449 |
[2] For the period March 2025, 51% of people could achieve a quote up to the average premium shown by postal town for comprehensive cover.
Will changing my address affect my car insurance?
Yes, changing your address could affect the cost of your car insurance. For example, if you’re moving to a ‘higher risk’ area, it’s likely your premium will go up. Likewise, it could go down if you’re moving to an area deemed less risky.
If your new home has a garage or driveway where you can securely park your car overnight, your premium might be cheaper if you didn’t have this before, no matter what your postcode is.
Just remember to let your insurance provider know about your change of address. If not, it could invalidate your policy.
Will having dual postcodes affect my car insurance?
If you have homes in two locations, it can make your insurance more complicated. This could happen, for example, if you’re a student dividing your time between your parents’ house and uni accommodation. Or maybe you live at a different address during the week for work purposes.
If you’re not sure which address counts as your main one, you’ll need to contact your insurance provider. They’ll help you figure out which postcode you should use.
Before you do that, it’s worth running both addresses through our car insurance quote tool. If one of the postcodes could get you a cheaper deal, ask your provider if you can use that one.
Just make sure you consult them, though. You don’t want to find yourself uninsured for giving a misleading address.
How can I reduce my car insurance premiums if I live in a high-risk area?
It’s not really feasible to up sticks and move across the country to get a cheaper deal for your car insurance, but thankfully there are other ways to lower your premiums:
Park safely overnight
Got a garage or a driveway? Parking your car off the street overnight means your car is less likely to be stolen or exposed to accidental damage from passing traffic.
Reduce your mileage
If possible, spend less time on the road as this means you’re a lower risk for car insurance providers. But always try to be as accurate as possible when estimating your annual mileage.
Choose a higher voluntary excess
You could choose to increase the voluntary excess you agree to pay if you make a claim. Remember, you’ll also have to pay any compulsory excess set by your provider, so make sure you set your voluntary excess at an amount you can afford.
Pay upfront
Paying annually for your car insurance normally works out cheaper. If you pay monthly, it’s likely you’ll be charged interest on the instalments.
Buy a car that’s cheaper to insure
If you’re in the market for a new car, look for one in a lower insurance group as it could help to lower your premiums.
Build a no claims discount
Driving safely with care could lower the risk of accidents and help build up your no claims discount.
Compare car insurance quotes
One of the best ways to find a cheaper deal is to shop around, no matter where you live.
We can help you compare car insurance quotes from a variety of trusted UK insurance providers. Just give us a few details, including your address, and we’ll take it from there.
FAQs
What happens if my car insurance is registered at the wrong address?
If your car insurance address is different to your UK registered address, your policy may no longer be valid. This means you could be driving around uninsured, which is illegal. Always be honest. Insurance providers will check and confirm your address is correct when you apply. If they refuse your application based on misleading information, it will be far more difficult and expensive to get insurance in the future.
Will temporary car insurance be affected by location?
Yes, it can be. If you’re taking out short-term car insurance, the price will be affected by where you are when you start the policy, not just where you live.
What else can affect the cost of my car insurance?
While your address plays a big role, it’s only one of several factors used to calculate your premium, which also include:
Your age – typically, young drivers are considered a higher risk on the road, so they should expect to pay more for their car insurance.
Your job – some jobs are perceived as being riskier than others, with more time spent on the road.
Annual mileage – the more miles you drive, the higher the risk of you having an accident.
The make and model of the car you drive and the insurance group it falls under have a big effect on how much you’ll pay. Generally, the more expensive and powerful your car is, the higher your premium.
Looking for something else?
Amy helps make sure you get the best value when choosing insurance. Thanks to more than four years’ experience at Compare the Market, she understands what people look for, working closely with insurance providers to offer you deals and services that are fair, easy to understand and right for your needs.
Stephen Maunder is an experienced personal finance editor, having spent more than a decade working for consumer print and online titles. He won several industry awards for his personal finance features at Which?, before becoming Deputy Editor at Compare the Market.
Rebecca Goodman is a freelance financial journalist who specialises in insurance, personal finance and consumer affairs.
Our content is written by a Compare the Market expert, backed by data and enhanced by technology. Find out how we ensure accuracy and quality in our Editorial Guidelines.
