Postcode change = increased premium

holybrook

Royal Mail changed the last 2 characters of the postcode for my property and 2 neighbours.  The new postcode is for these 3 properties only.  However my insurance company increased the premium when notified, when I challenged this saying that the property had not moved and the risk had not changed they said something like 'unfortunately premiums are based on postcode lookup',  As this is a new postcode for these 3 cottages (250 years old) there would be no claim history it seems the insurance industry can do what they like without any route for challenge! 

dunstonh

As this is a new postcode for these 3 cottages (250 years old) there would be no claim history

And that is likely your issue.  It is an unknown quantity compared to the old postcode where sufficient data had built up.  So, it is priced accordingly.  It is also possible that the new postcode doesn't register on their systems yet and it is getting the premium rating for an unknown postcode.

it seems the insurance industry can do what they like without any route for challenge! 

There doesnt appear to be any wrongdoing here and the pricing decision seems logical when you consider how they price these things.

holybrook

Therein lies the problem, underwriting is done by computers with no route for the consumer to interject when it encounters the unknown.  I was not suggesting "wrongdoing" just pointing out the system is flawed as there is no route for challenge.

JJ_Egan

Even before computers premiums where based upon postcode/ area .

If i move half a mile down the road premium drops .Move to other areas and price rises significantly .

holybrook

Yes but we have not moved, so really frustrating

Sandtree

holybrook said:

Therein lies the problem, underwriting is done by computers with no route for the consumer to interject when it encounters the unknown.  I was not suggesting "wrongdoing" just pointing out the system is flawed as there is no route for challenge.

Its not a "problem" as much as a double edge sword, there are those that an underwriter and pricing actuary will look at individually but you immediately add £400 to the quote or more for the fact you've got highly qualified individuals looking at and discussing the quote and that well under 10% of quotes results in sales.

In the vast majority of cases a computer dealing with the unknown is still much cheaper than actuaries looking at the unknown and being able to consider a wider range of facts.

The other issue is that "new postcodes" are not always new but recycled and so they may have adverse claims history associated with them from when they were previously covering the bad part of the neighbourhood.

[Deleted User]

You could try invoicing RM for your costs. Their change cost you money.