If you happen to be moving to a new postcode, experts say you may need to prepare yourself for a nasty shock once it comes time to update your motor car insurance, as many car insurance companies may refuse to offer cover if the area you are moving to is considered to be too high risk.
Insurance providers use things like geographical location to assess the risk of their customers before supplying them with car insurance rates, and usually use postcode as a rubric for measuring risk by neighbourhood. However, there are some places in the UK where moving just a few hundred feet can result in insurers either raising rates by astronomical amounts or by declining to offer cover completely due to these postcode-based risk assessments.
Industry experts say that this has been happening more and more over the past few years, especially in the wake of the credit crunch and the following worldwide economic recession. One particular customer even related a story in which he moved from his north London address to a temporary one in Exeter, yet when moving back he was told by his insurer that his new address (which had been his old address for years) was now uninsurable, and promptly voided his insurance without even being provided a grace period to arrange new insurance.
The unfortunate motorist was lucky enough to secure insurance cover from an alternative provider within just a few hours. Of course the £380 premium he had been paying whilst living in Exeter ballooned to a massive £980 a year, since he had returned to north London, though the AA said that out of its 26 insurers, only 12 of them would insure vehicles registered at the man’s north London address due to postcode-related risk.