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Motor insurance: Britain’s priciest postcodes

Model car on coin pilesMotor insurance premiums have been soaring over recent months. Motorists all over the UK have faced huge increases in the cost of cover, driven to a large degree by a rise in fraud and the amounts that insurers now have to pay out to accident victims.

The most recent Car Insurance Price Index showed that prices had risen by almost 40 per cent in the past year.

In the July-September 2010 period, the average cost of an annual comprehensive policy was £650, up £178 from £472 in the same quarter of 2009.

Some groups have been hit harder than others. Young drivers, for example, who already faced higher insurance costs due to the fact they are more likely to be involved in accidents, have suffered disproportionately. (See: The big debate: Why are car insurance premiums soaring?)

Those in the 17 to 20-year old age group now pay an average of £2,080 for cover – up more than 42 per cent in the past 12 months.

Postcode pricing

But age is just one factor in how premiums are calculated: where you live can have just as dramatic an effect on the cost of cover, as the study shows.

So which are the most expensive areas in which to insure a car?

Unsurprisingly, those who live in Britain’s cities are likely to face higher premiums, given the increased risk of accidents and theft.

And to make matters worse, residents in the larger conurbations have also seen their costs rise faster over the past few years than those in other areas.

Highest costs

The recent price rises have pushed average premiums in many parts of the capital through the £1,000-a-year barrier.

In East London, for example, the average comprehensive policy is now an eye-watering £1,206. So drivers in Bethnal Green or Stepney, for instance, have been hit with an increase in the cost of cover of 55 per cent in the past 12 months.

In North-west London, the average policy now costs £1,053, while in Ilford, Greater London, it is £1,047.

Overall, the average cost in inner London is £991 a year, up 45 per cent from 2009.
Outside London, motorists in the Manchester/Merseyside area now paying £873 annually (also up 45 per cent) – in Oldham the rate is £974 a year.

While policy costs elsewhere may be lower, the rate of increase has been just as devastating.

In the Leeds/Sheffield region, prices have risen by 44 per cent in 12 months, and Bradford in West Yorkshire is one of the most expensive areas in the country at £950 a year for a comprehensive policy.

The North-west has also been hit hard. In Bolton and Blackburn, for example, prices have gone up by more than 50 per cent since last September, with average premiums now £895 and £878 respectively.

How to keep your bills down

Although age and postcode have a significant effect on the cost of car insurance, there are other steps you can take to keep your premiums under control:

  • Risk of theft: the more likely your car is to be stolen, the more it will cost to insure. So by parking your vehicle off the street - in a driveway or garage, for example - you may pay less for cover. The same applies to fitting security measures such as immobilisers and alarms.
  • Drive less: if you use your car a lot or to commute at busy times, you increase the chances of being involved in an accident. Consider travelling to work by public transport.
  • Named drivers: if other people on your policy are considered high-risk, your premiums will go up. It may be more cost-effective to insure a son or daughter for temporary periods rather then for the whole year. (See how to take out temporary car insurance.)


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Chris Torney

Chris Torney

Chris is the former personal finance editor at the Daily Express. He's been a journalist for more than 10 years and contributes to a wide range of finance and business titles.Read more from Chris

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