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Car insurance: Drivers in some areas pay FOUR TIMES as much as others for same cover

Don't count on it: cheap premiums and the choice of insurer may depend on where you live

Car insurance postcode lottery: We reveal how insurers charge up to FOUR TIMES more for car cover in east London, compared to rural Shropshire

  • Insurers can quadruple the cost of car coverage just based on your zip code
  • These companies may also increase deductibles, which increases the cost of the claim
  • Even shopping around may not help, as many insurers ignore some zip codes.

Drivers face an insurance postcode lottery that can see them pay up to four times as much for car insurance premiums depending on where they live, This is Money analysis has revealed .

The problem doesn’t stop at premiums either, because if you’re in a ‘risky’ area, many insurers also charge high unavoidable deductibles – the money you have to pay before a claim is paid.

A motorist’s location, along with other factors such as driving history and type of vehicle, all affect how much drivers pay.

Insurers are keeping tabs on exactly how they set their premiums, arguing it is commercially sensitive information.

But it is known that when it comes to where you live, insurers consider factors such as the risk of theft and the statistical probability of floods and accidents in order to set premiums.

Don't count on it: cheap premiums and the choice of insurer may depend on where you live

Don’t count on it: cheap premiums and the choice of insurer may depend on where you live

So to give an idea of ​​how where you live affects what you pay for car insurance, This is Money compared quotes for a range of vehicles, keeping everything the same but using multiple postcodes. different.

These ranged from Newham in east London, the place with the highest premiums in the UK, to the rural village of Hodnet in Shropshire – voted the UK’s poshest.

We have also included the expensive area of ​​Chelsea in West London due to its high proportion of expensive vehicles.

Unsurprisingly, drivers in the east London postcode pay the highest premiums – up to 3.94%, in the case of the Land Rover Discovery, where insurance costs range from £759.71 to £2,999.73.

But it’s not just premiums that increase depending on where you live, your mandatory deductible can also increase.

This is something that is often overlooked by consumers buying car insurance, which is often done based on premium price.

How auto insurance premium quotes vary by zip code
Car east london West London Rural Shropshire
Land Rover Discovery £2,993.74 £2,553.67 £759.71
Mercedes E-Class €2,136.78 £2,098.99 £685.63
BMW 3 Series £1,395.95 £1,072.03 £646.41
Honda Jazz €1,144.33 £893.46 £556.84
Ford Fiesta €1,113.42 £884.63 £560.45
Vauxhall Corsa £1,075.47 £851.22 £560.45
volkswagen golf £955.80 £823.64 £569.85
From GoCompare, all quotes are the cheapest available

Much like the premium example above, people living in zip codes considered riskier by insurers tend to pay higher deductibles.

But this is not true in all areas. For example, our example of a driver insuring a Ford Focus would pay an excess of £150 in East London – the ‘riskiest’ area we tested.

This excess amounts to £350 for West London and Shropshire.

For other cars, the mandatory deductibles remain the same regardless of location.

How insurance deductibles change by location
Car east london West London Rural Shropshire
Land Rover Range Rover £1,400 £1,400 £650
Land Rover Discovery £500 £500 £350
volkswagen golf £350 £350 £250
Honda Jazz £500 £500 £250
Mercedes E-Class £350 £350 £350
From GoCompare, all quotes are the cheapest available

Another factor that varies depending on where you live is the number of insurers willing to give you a quote.

More quotes equals more competition, which normally means a higher chance of a consumer getting a lower price.

But for every car we tested, the number of insurers willing to give a quote dropped dramatically based on the perceived risk in an area.

A person insuring a Range Rover in Newham would only have a choice of four insurers, for example, while the driver in Shropshire would have 16.

How car insurance quote counts vary by zip code
Car east london West London Rural Shropshire
Ford Fiesta 30 38 42
Honda Jazz 27 31 46
Vauxhall Corsa 27 41 44
volkswagen golf 24 33 34
BMW 3 Series 18 20 26
Mercedes E-Class 16 23 31
Land Rover Discovery 11 14 22
Range Rover 4 11 16
At GoCompare

A spokesperson for the trade body Association of British Insurers said: ‘Your postcode can impact the cost of your car insurance, for example by reflecting the car crime rate where you live.

“But it will be one of many factors an insurer will take into account – such as your age, claims history and type of vehicle – when assessing your risk.

“You may not be able to do anything about where you live, but car insurance is competitive, so you can shop around to get the best car insurance deal for your needs.”

> Read the This is Money guide to reducing the cost of car insurance

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