Featured Article: What are the riskiest areas to live in?

We all know that car insurance firms like to stereotype people, with young drivers being the most obvious target. However it also appears that the place you live also has a significant influence, with research by Moneysupermarket.com suggesting that people living in an area considered more risky by insurers can be forced to pay up to £500 more for insurance every single year.

People living in Truro (Cornwall) are considered the one’s least likely to make a claim, but the majority of the top ten “safest” areas are in Scotland:

The ten areas listed above have an average annual insurance cost between £300 and £400. However, the most expensive areas had prices between £800 and £900. The number one most expensive area is Ardwick in Manchester, with the majority of the top ten list being highly populated areas:

There are a number of reasons for this trend, with cars parked in more populated areas being more likely to be vandalised and crowded city centre being more likely to be the seen of an accident. This was confirmed by the head of motor insurance at Moneysupermarket.com, Steve Sweeney, who stated that urban areas are more likely to be the scene of crime than urban areas of Scotland.

This is a situation which will only get worse, with the AA recently reporting that car insurance costs have increased by about 50% for most drivers since the start of the year as insurance firms struggle to re-coup the costs of insuring risky drivers. Aviva UK Chief Executive Mark Hodges recently admitting that his company would be forced to raise prices for customers in the future in an interview with The Wall Street Journal. He blamed the rising cost of injury cover as the reason, but many industry experts believe that the increasing number of fraudulent claims being made is the underlying cause for the present crisis in the car insurance market. This has been labelled as the ‘crash for cash’ scheme by police, who are aiming to stamp out the craze with threats of £150,000 fines and two year jail sentences for those convicted of making a fraudulent claim.

It isn’t just postal areas being stereotyped however, young drivers are also being hit hard by insurance hikes according to thisismoney.co.uk, who state that drivers aged between 17 and 20 now face an average insurance cost of £2,879 annually. Surprisingly women over the age of 60 also appear to have been targeted, with Which magazine claiming that the average 60 year old woman is paying £80 more for insurance this year than in 2009. It therefore appears that second hand cars that have had only one lady owner are no longer the thing to look for.