INSURANCE company bosses are being urged to cut household premiums to reflect a town's falling crime rate.

Middlesbrough Council says while the town has experienced a 39 per cent reduction in house burglaries since 2001, residents are still paying above average premiums for their home and contents insurance.

A survey has found while most households across the UK pay £146, the average premium in Middlesbrough is about £220. The extra cost faced by residents could add up to £10m.

Council cabinet member Councillor Barry Coppinger said: "We want insurers to set premiums which reflect the fact that Middlesbrough is tackling crime effectively and becoming a safer town. Local people are seeing an improvement in their quality of life - and they should be seeing a financial reward too.''

"The insurance industry admits that its method of using postcodes to set premiums is not ideal as it can't pinpoint the high and low risk areas that you often find in a single neighbourhood.''

Coun Coppinger has written to the Association of British Insurers urging companies to base their judgement for premiums on the reduced crime rate.

A spokesman for the association said crime was only one risk incorporated into a premium - storm damage and flooding were others.

"Insurance covers a wide range of risks," he said.

"You are not just considering one risk which may be falling, but other risks.

"Home insurance is a very competitive market and you can save money by shopping around. You do not have to take the first quote you are offered.

"We would refute any suggestion insurers are profiteering."