Insurers Found To Be Undervaluing Written-Off Cars

A warning has been issued to insurance firms around the UK not to undervalue cars when settling insurance claims, particularly at the moment when drivers are facing increasing amounts of pressure on finances during the cost of living crisis.

The Financial Conduct Authority (FCA) has found that, in some instances, insurance providers are offering prices lower than the fair market value for cars that have been written off after an accident. Furthermore, it has also been found that claims staff are only offering fair market prices following a complaint from the driver.

It may be that insurers are looking to control claims costs because of the rising cost of living, but it’s possible that in doing so they’re actually causing harm to consumers. Ultimately, it is not permitted under FCA rules to offer a price lower than fair market value and, as such, the watchdog is taking action against those companies found to be flouting the rules.

Sheldon Mills, executive director of consumers and competition with the FCA, said: “When making an insurance claim, people shouldn’t need to question whether they are being offered the right amount for their written off car or other goods that they need to replace. 

“Insurance firms should offer settlements at the fair market value. This is especially important now as people struggling with the cost of living will be hit in the pocket at precisely the time they can ill afford it. We are watching the behaviour of firms closely and will act quickly to stop firms and prevent harm to consumers where we see it.”

If you think your claim may have been undervalued, you can put a complaint into your insurer and then the Financial Ombudsman if your complaint is not resolved.

Here at Car Buying Solutions, we offer the very best price for your scrap car, as well as guaranteed payments. As long as the vehicle is as described when we provided the quote, you can rest assured that we will pay out the agreed-upon sum. If you need a scrap car valuation, get in touch with us today.