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.
Notes to
editors
-
Read our 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 stelling
insurance claims and set out our expectations for firms when
handling claims.
