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Your are here: Home // Reviews // Learn how and why the location is important for home insurance. Learn how and why the location is important for home insurance. Posted on Mar. 22nd, 2013 by admin. Buying home insurance is certainly …

Luigi Cappel‘s insight:

New Zealand recently had its first Census in 5 years, the last one was postponed because of the Christchurch earthquakes. This of course makes the information from those earthquakes even more important to many authorities including insurance companies.

Insurance companies are businesses like any other. They try to measure risk based on a wide range of information. They have a GIS department or access to location based information as outlined in this article. They then try to have more clients in less risky places to cover the likelihood that they will have to pay out to others.

As the article suggests, citizens also have access to a lot of information, but most of them, even if they are aware of it, don’t use it. I live in a house that has a 100 year flood risk. Fortunately it has never happened and the location is worth taking that small risk. I was able to look at Census information to find out about the make up of the area, average incomes, ethnicities, how people get to and from their work, average size of family and much more, all of it for free, all I had to do was go to the Statistics Department website and use their free tools.

This is smart practice for many businesses, but what I found in practice was that most businesses don’t think much beyond finding a location at a good price that appears to look good. Perhaps they are so excited about starting their business or moving their business that they don’t give it a lot of thought.

In practice when I was involved in building a web based tool that would help people visualise appropriate information, I found that most businesses, SME businesses, didn’t even know what questions to ask. They knew location was important, but that’s where it stopped.

Large companies can employ business analysts who have studied statistics, but most companies look to set up for many of the wrong reasons, such as rent, being close to their home so they don’t have to commute too far, a building that doesn’t need much modification.

More important questions might be, where do a high density of people live or work that would like my products or services? Can they afford my products? Would they drive or use public transport? Are there similar businesses to mine that I can collaborate with, or even competitors who will hep drive more people to the area?

There are obviously many questions for each industry, but the answers are there. The key is knowing what questions to ask and having tools or consultants who can help you with those and interpreting the answers.

It is ironic that most people know Location, Location, Location are all critical, but they don’t place it high in the decision factors and often that is the reason why their business thrives, survives or dives.


About Luigi Cappel

Writer for hire, marketing consultant specialising in Location Based Services. Futurist and Public Speaker Auckland, New Zealand
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