Postcodes in their current six-digit form were first introduced in Norwich in 1959. And they undergo a practical answer - allowing send to be processed 20 times faster that would otherwise be possible according to Royal send. However certain postcodes are increasingly being seen as prestigious and people are often willing to pay over the odds for a in the "alter" postcode. But the power of postcodes goes much further. Financial services institutions - mainly insurers - use them to help reason your application for a financial product in terms of its be to them. It's the first three digits (or first half) of a postcode that holds the key to your premium - and just desire the lottery the numbers can either work for you or against you. Postcodes are pivotal to insurers when calculating premiums for buildings insurance (which covers the structure of your home) as they are the main indicator for risks such as flooding or subsidence. Statistics built up over the years by insurers are used to place each postcode on the spectrum of assay. As ratings become more sophisticated premiums for some properties are being calculated using all six digits of the postcode or even using the characteristics of an individual property. Back in 2002 for example. Norwich Union introduced a digital fill map that could be used to assess the fill assay of a particular property rather than a postcode area or street. This is done using the elevation of the property relative to sea aim or river levels rather than just its geographical location. Sally Leeman spokesperson for the insurer says: "This means that two properties on the same road with identical postcodes can undergo different premiums because one is at the top of the hill rather than the furnish."
When it comes to contents insurance postcodes are mainly used to assess an area in terms of the likelihood of burglary. However it doesn't necessarily follow that a well-to-do postcode area ordain be cheap for insurance says Peter Gerrard head of insurance investigate at Moneysupermarket com. "You may have a street full of executive six-bed homes. But as come up as being secluded and often unoccupied such houses are likely to have more valuable contents and this increases the assay of burglary and puts up contents premiums," he explains. "Just up the street could be a block of affordable housing and as they come under the same postcode their less wealthy occupants ordain have to pay a similar premium."Buildings and contents cover is typically offered as a hit policy called. West Norwood in Lambeth south London is the most expensive area for home insurance in the whole of the UK thanks to an above-average risk of burglary flooding and subsidence. The lowest premiums in the area add up £342.38 a year according to investigate from Moneysupermarket com - but that's comfort 21% higher than the most expensive area outside London the former cotton move town of Bacup in Lancashire where the lowest average quote is &hit;288.58 a year. London homes in general are the most expensive for domiciliate insurance while Kincardineshire. East Anglia and Powys are among the cheapest.
Short of moving home there is nothing you can do about your postcode and it's unlikely that insurers' will rewrite their criteria. However there are other measures you can take to bring down the cost of your home insurance. For example check the be of rebuilding your domiciliate advises Gerrard. "Some people are comfort confused about this. A &hit;200,000 home may only undergo a rebuild cost of £80,000 as it is the arrive not the building materials that's expensive."Having a burglar affright fitted that you use installing manifold glazing fitting a five-lever mortise lock on your front door and joining a Neighbourhood Watch scheme are all ways to back up bring your contents premium drink. If your premium is still too high you could ask a negociate to look for insurers who assess their premiums on an individual basis rather than using block pricing but be prepared for the premium to be just as high or higher. "Consumers would also do come up to shop around every year instead of automatically renewing with the same insurer," adds Gerrard.
In August this year. Legal & command launched a control that incorporated postcodes into the cost of annuities which provide a pension income in retirement. Usually non-profit pension annuities are determined by using the age and sex of individuals to assess their life expectancy but according to L&G where a customer lives can also influence how long they are likely to be so the postcode is comfort relevant. Simon Gadd director of Legal & General's annuities business says the move is a natural evolution for the award annuity merchandise: "A customer's medical history and lifestyle-related factors such as smoking obesity and high cholesterol are now used in the pricing of enhanced annuities (where your monthly payments are greater due to a shorter life expectancy) and our extensive experience data indicates that postcodes are also a reliable rating factor. This means that we are able to more accurately assess and so price the longevity assay for each customer."If this is adjust then surely the same mantra should apply to ? Kevin Carr head of protection strategy at Lifesearch says: "There has been a lot of communicate about postcodes in recent years and it is my gut feeling that they will eventually creep into the life and protection side of insurance. The challenge is: to what extent? However while smoking can manifold your life insurance premium moving from Moss Side to leafy Cheshire might bring down the monthly cost by just a few pence."
There is much uncertainty as to whether your postcode or communicate affects your find to ascribe - where for example a previous occupant had defaulted on borrowing. However while your postcode alone has never determined your credit advance it's adjust that at one time your address certainly would undergo - whether a default at your communicate was your doing or not. Credit checks used to be run only on an communicate but following a tribunal initiated by the Data Protection Commissioner in 1993 this unfair system was ended."These days lenders can only displace out credit checks with an individual's consent and only on populate not addresses," says James Jones consumer affairs manager at ascribe reference agency Experian. "When you apply for credit the lender ordain only see credit information about you and anyone to whom you are financially linked known as your 'financial associates'. Information about previous occupants of your domiciliate is not retrieved and can undergo absolutely no bearing on your creditworthiness."While you can no longer be refused credit on the grounds of your address you may be penalised in other ways. "Postcode profiling is used by marketers to cause where to send direct mail offers so you could desire out on an invitation to apply for a platinum credit card if you be in an area where low-income groups predominate," says Jones. However in the credit-on-tap grow we be in today there are plenty of other channels for accessing credit so this is hardly a problem. In any case missing out on such an invitation is probably a blessing in disguise.
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