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How does my postcode address affect my car insurance?

The make and model of your car isn’t the only factor that determines the price of your car insurance. Where you live could play a big role too. Find out how your postcode can affect how much you pay for your car insurance premiums.  

The make and model of your car isn’t the only factor that determines the price of your car insurance. Where you live could play a big role too. Find out how your postcode can affect how much you pay for your car insurance premiums.  

Written by
Julie Daniels
Motor insurance comparison expert
Reviewed by
Rebecca Goodman
Insurance expert
Last Updated
17 MAY 2023
5 min read
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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.

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 a low risk, while those in group F are the highest level of risk.  

What postcodes are considered the highest risk?

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 flows. The more cars there are on the road, the greater chance there is of an accident.

Urban areas often have higher crime rates too. According to recent government statistics, the number of vehicle-related offences reported increases in correlation with how urbanised an area is. Insurance providers consider the risk of your car being broken into or stolen when they calculate the price of your insurance premium.

Which postcode is most expensive for car insurance? 

According to Compare the Market insurance data in April 2023**, the UK regions with the highest average premiums were:

Area Average premium
1. Greater London £1,029
2. West Midlands £779
3. North West £740
4. Yorkshire and the Humber £721
5. Northern Ireland £623

**For the period November 2022 to April 2023, 51% of people could achieve a quote up to the average premium shown by region for all cover types.

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 normally, less crime.

Which postcode is cheapest for car insurance?

According to Compare the Market insurance data in April 2023**, the UK regions with the cheapest average premiums were:

Area  Average premium
1. South West £484
2. Scotland £523
3. Wales £533
4. South East £593
5. North East £598

**For the period November 2022 to April 2023, 51% of people could achieve a quote up to the average premium shown by region for all cover types.

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 the country.

However, if your new home has a garage or driveway where you can securely park your car overnight, your premium might be cheaper, 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 your car insurance? 

It can make your insurance more complicated. This could happen, for example, if you’re a student dividing your time between home and uni accommodation. Or you may be a high-flyer who lives at a different address during the week.

If you’re not sure which address is 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:

  • Parking your car off the street overnight means your car is less likely to be stolen or exposed to accidental damage from passing traffic.
  • Try to be as accurate as possible when estimating your annual mileage to make sure you’re not paying over the odds.  
  • 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. 
  • 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.
  • If you’re in the market for a new car, look for one in a lower insurance group as it should help to lower your premiums.
  • Driving safely with care could lower the risk of accidents and help build up your no-claims discount.

One of the best ways to find a cheaper deal is to shop around, no matter where you live.

We can help you compare 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.

Start comparing car insurance quotes now and find a deal that suits you and your car. 

Frequently asked question

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 one of several other factors used to calculate your premium, including:

  • 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. 

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Julie Daniels - motor insurance comparison expert

Julie is passionate about delivering a great customer experience and rewarding people for saving on their insurance through our loyalty and rewards programme. She’s spoken to the media, including outlets like Sky News and Capital FM, about car and home insurance, as well as our rewards scheme.

Learn more about Julie

Rebecca Goodman - personal finance expert

Rebecca Goodman is a freelance financial journalist who specialises in insurance, personal finance and consumer affairs. Rebecca regularly writes for national newspapers including The Independent and The Mail on Sunday on a wide-range of financial topics. She covers everything from money-saving tips and holiday advice to investigations into how energy efficient appliances can cut the cost of household bills and the impact donating money can have on those in need. Along with features in national papers, Rebecca also writes news stories for websites including Yourmoney.com and The Money Edit.

Learn more about Rebecca

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