Is your postcode becoming an insurance risk?

Where your home is located has always played a part in your insurance – but in recent years, it’s started to matter more than ever.

From coastal properties exposed to harsher weather to homes in areas seeing more frequent flooding or ground movement, some locations are becoming much trickier to insure than they used to be.

For owners of high-value homes, this can make things a little more uncertain. Not just in terms of cost, but in how easy it is to find cover that really matches the property – and how confident you can feel that it’ll hold up if you ever need it.

Across the UK, weather is becoming more extreme¹. Areas that weren’t traditionally flood prone are now seeing regular flooding², while storms are becoming more disruptive3 – and damaging.

Take coastal homes, for example. While incredibly popular, they’re exposed to some of the harshest conditions, with strong wind, heavy rain and higher flood risk all adding up. Even things you wouldn’t expect like salt in the air can cause issues, as it can slowly wear down fixtures and metalwork over time. According to the Environment Agency, around 5.2 million properties in England are already at risk of flooding caused by climate change, and that number is only expected to rise.

Elsewhere, the risk looks a little different, but it’s still worth taking note. Storms can cause sudden damage to buildings while longer, drier spells can lead to ground movement and structural issues like subsidence.

As these risks increase, insurers are responding in two key ways: increasing premiums and reducing the availability of cover.

You’ll probably be more familiar with rising premiums. In simple terms, you can still find the insurance you need – it just costs more. In higher-risk areas, that can mean renewal prices increase as insurers know you’re more likely to make a claim.

But there’s a second approach insurers are taking. In some cases, insurers may pull back their offering entirely. Instead of continuing to increase prices, they may become more selective with the cover they offer or stop insuring homes in certain locations altogether.

That’s where reduced availability comes in. You might have had the option of several different insurers to insure your high value home, but you might now find that you have fewer options. In more extreme cases, you may not be able to find cover at all.

Simply put, you’re underinsured if your property isn’t covered for its full rebuild cost.

Let’s say your home’s rebuild value is £900,000, but it’s only insured for £600,000 because of an outdated valuation. If something went seriously wrong and you then had to rebuild your home from scratch, you’d look to your insurance to cover you.

But because you were underinsured, your provider wouldn’t pay out the full amount you actually need. Instead, they’d activate something called the average clause, and you would receive a maximum of £600,000. That means you’d have to fund the remaining £300,000 yourself.

Two-thirds of UK properties are underinsured⁴, but it’s actually tougher to spot underinsurance when it comes to high-value homes.

That’s because these kinds of homes tend to include bespoke features, specialist materials, and high levels of craftsmanship. If these details aren’t fully reflected in your policy, it’s easy for there to be a gap.

For many homeowners, standard insurance does the job. But for higher-value properties – especially those in more exposed locations – things aren’t always quite so straightforward.

That’s because these policies are usually built around more typical homes. Once you start adding in bespoke features, higher rebuild costs and location-based risks to the equation, it can become harder to make sure everything is properly accounted for.

A more specialist approach takes a closer look at these details. From accurate valuations to access to insurers who have experience covering more complex properties, it can help make sure your cover is a good fit for your home – and that it’ll be there for you should you ever need it.

Sources:

1. Climate extremes are becoming the new ‘normal’ for the UK - Met Office

2. National assessment of flood and coastal erosion risk in England 2024 - GOV.UK

3. How will climate change affect the UK? - Greenpeace UK

4. Two thirds of UK households underinsured | MoneySuperMarket

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