Local insurance broker Howden Insurance is warning new-build homeowners in Carterton of potential postcode discrepancies that could mean they are unduly paying higher insurance premiums.
New-build homes have become increasingly popular, with Oxfordshire experiencing a ‘new-build boom’. Between 2017 and 2020, an extra 10,000 homes were built across the county, with three local authorities making the top 10 for new-build homes being developed.
The various financial incentives developers offer make new-builds an attractive prospect, especially for first-time buyers. There can also be added benefits such as a shorter chain, modern security and energy-saving features, and moving into a fit-for-purpose property that does not require expensive or lengthy renovations.
Before prospective new-build owners can complete their purchase, building insurance is required; and you will need to provide insurers with a postcode to obtain a quote. It’s a crucial piece of the puzzle that insurers use to determine your risk profile, and ultimately calculate your premium.
But when new estates are built, they create new postcodes, which are often not on insurers’ systems yet. So, with no postcode to infer information from, insurers will default to the ‘high risk’ end of the spectrum for your home, to protect their risk – or even refuse to quote.
Steve Aldous, Branch Manager at Howden Carterton, explained: “We’ve had several new estates appear in recent years in our community, much like other parts of the UK, and I fear many residents just don’t know that they could be paying more than they deserve to, just because of an admin discrepancy.
“Insurers take many things into account when calculating your premium, and the postcode is key because it reveals so much about your property, from the flood risk to local crime rates. But with nothing to go on, as is often the case for new-builds, insurers can deem your home high risk.
“If you’re entering your details online on an insurance website, you could either find yourself ‘no-quoted’, leaving you with the stress of finding someone that will insure you, or with a much higher premium than you truly need.
“Even an extra £10 or £20 a month ‘higher’ could equate to hundreds being unduly spent on a high-risk premium each year, when your home isn’t truly in this category.”
Though inflation has fallen in recent months, the cost-of-living crisis has been a significant strain on many people’s budgets, with the price of everything from fuel, household energy and supermarket shops much higher.
The insurance market has seen considerable turbulence in recent months, with car insurance increasing by over 67% in the 12 months to the end of November 2023, and home insurance now more than 40% higher on average, in the year to January 2024.
For new-build homeowners then, spending an extra £240, for example, unnecessarily on the wrong level of home insurance, could be a costly mistake.
Resolving this postcode issue is possible, but it can be a long-winded process that involves contacting your building developer, the Royal Mail and subsequently finding an insurer that has updated their systems so that your new address appears on file.
Steve continued: “Buying a home and moving is already stressful enough; who wants the hassle of chasing up even more contacts in addition to your solicitor and estate agent, all with the fear that you’re not properly covered while you wait?
“As a broker, we do the legwork. We can go directly to insurers to provide them the information they need to update their databases, to ensure your new-build isn’t misrepresented as high-risk. Our job is to act as an advocate for you with insurers, and communicate the nuances and specifics of your circumstances, to get you the best value premium.”
Howden Insurance is part of the global insurance group Howden, and one of the largest specialist insurance distribution groups in the UK.
Its unique high street branch network continues to grow, with over 200 branches and centres, supporting clients in communities across the country with a comprehensive portfolio encompassing personal, business, corporate, rural, private clients, and niche insurance brokerage.
