Paying the price of a new postcode

Retired London bank manager Donald Coleman, 73, of Eynsham, told his insurance broker the Post Office had changed his postcode -- and then was informed he would have to pay out more money to keep his car on the road.

Mr Coleman's W reg Ford Focus is insured with Zurich, but the cover was brokered for him by the Heath Lambert Group, who in turn sell their services through Mr Coleman's trade union, the Lloyds TSB Union. A spokesman for the Heath Lambert Group said: "Premiums are set by postcode throughout the UK insurance industry."

So all motorists living in the former OX8 area, changed to OX29 in December 2000, may now be paying more for their car insurance.

Mr Coleman, who has lived at the same address in Acre End, Eynsham, for the last 18 years, said: "It doesn't seem right because the Post Office originally said that the change was to enable them to offer better postal services. I have even written to my MP, David Cameron, about this."

"Why should people be landed with extra costs when they continue to live in the same area?

"I told the brokers of the change in postcode but they took no notice until I finally corrected it in red ink and sent back their letter.

"Then they asked for another £11 as a result!

"They said that the postcode change had lifted me from group four to group five."

A spokesman for Royal Mail said: "We really do only use the postcodes for purposes of delivering mail and we have no control over how other people use them.

"But in the past when postcodes have changed and premiums have risen as a result, insurance companies have lowered their premiums to previous levels.

"There was even a case that went to the Ombudsman who found in favour of the householder."

She suggested that Mr Coleman should contact his broker first and then the Association of British Insurers if he was not satisfied.

The spokesman for Heath Lambert Group said he would make contact with Mr Coleman to discuss the matter.