General Insurance Article - FCAs concerns over insurers valuation of vehicles

The Financial Conduct Authority (FCA) has identified shortcomings in how some motor insurance firms are valuing written-off or stolen vehicles.

 An FCA review has found evidence that suggests some firms are offering their customers less than their written-off or stolen vehicle is worth and, in some cases, are only increasing that offer when a customer complains.

 This comes despite the FCA’s previous warnings that insurers must not undervalue cars or other insured items when settling claims.

 The regulator is engaging with the firms included in its review to ensure they make improvements to address the FCA’s findings.

 Sheldon Mills, Executive Director, Consumers and Competition at the FCA said: 'Having your vehicle written off or stolen can be intensely stressful and we expect firms to offer the right support to help their customers.

 'We expect all motor insurers to take note of our findings and we are engaging directly with those that have issues that need to be addressed.'

 Insurers must handle claims promptly and fairly under FCA rules.

 Following the introduction of the Consumer Duty in July 2023, firms are also required to ensure consumers are at the heart of their business and must act to deliver good outcomes for them.

 Customers who think their claim may have been undervalued can complain to their insurer and then to the Financial Ombudsman Service if their complaint is not resolved.

 Read the FCA multi-firm review into insurers’ valuation of vehicles.

 The FCA’s Consumer Duty requires firms to act to deliver good outcomes for retail consumers, and that they are supported while using a financial product, including when they make claims.

 In December 2022 the FCA warned insurers not to undervalue cars and other insured items when settling insurance claims and set out our expectations for firms when handling claims. 

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