If your car or van is stolen or written off, the last thing you need is a secondary battle with your insurance company over what it’s worth. Unfortunately, a recent review by the Financial Conduct Authority (FCA) suggests that for many drivers, that battle is becoming a reality.
The regulator has uncovered evidence that some motor insurers are consistently offering customers settlements below the actual market value of their vehicles. Even more concerning? Some firms only seem to offer a fair price once a customer officially complains.
The “Wait and See” Strategy
The FCA’s findings highlight a troubling trend where initial offers are intentionally low. This “lowballing” forces the burden onto the consumer to prove their car’s worth, despite the FCA’s previous warnings in December 2022 that this practice must stop.
“Having your vehicle written off or stolen can be intensely stressful,” says Sheldon Mills, Executive Director of Consumers and Competition at the FCA. “We expect firms to offer the right support and we are engaging directly with those that have issues that need to be addressed.”
The Impact of Consumer Duty
Since July 2023, the stakes have been higher for insurers due to the Consumer Duty. This regulation isn’t just a suggestion; it’s a requirement for firms to:
- Put consumers at the heart of their business.
- Act to deliver “good outcomes.”
- Provide support during the claims process, rather than creating hurdles.
When an insurer offers a settlement they know is below market value, they aren’t just being “frugal” they are likely in breach of these fundamental regulatory requirements.
What Should You Do if Your Claim Feels Low?
If you are currently dealing with a claim and the offer feels like a “lowball,” you have clear paths for recourse:
- Don’t accept the first offer immediately: Research the market value using reputable price guides and local listings for similar makes, models, and conditions.
- File a formal complaint: State clearly why you believe the valuation is incorrect. Under current FCA observations, many firms are only correcting their offers at this stage.
- Escalate to the Ombudsman: If your insurer refuses to budge, you can take your case to the Financial Ombudsman Service (FOS). They have the power to overrule the insurer if the valuation is deemed unfair.
The Bottom Line
The FCA warning: We are watching and we will be engaging with the firms identified in the review to ensure they improve their valuation processes. For the insurance industry, the message is clear: Fair value is a right, not a negotiation tactic.
The VINTTRO Claims Advantage
At VINTTRO Cover, we believe you shouldn’t have to navigate these hurdles alone. We have our own in-house claims team dedicated to guiding you through any anomalies in your motor insurance cover. Whether you are facing a valuation dispute or general claims-related issues, our experts are here to provide the peace of mind that comes with VINTTRO Cover. We don’t just provide a policy; we provide the comfort of knowing someone is in your corner when it matters most.
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