Round 270,000 motorists to obtain compensation after being ‘short-changed’

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Your help makes all of the distinction. Learn extra An estimated 270,000 motorists are anticipated to obtain £200 million in compensation, after the Monetary Conduct Authority (FCA) discovered some insurers had short-changed prospects on stolen or written-off car claims.

Of this, £129 million has been paid up to now to just about 150,000 prospects, referring to the historic claims, the regulator stated.

The FCA carried out detailed work with insurers, following an preliminary overview final yr, which discovered that in some circumstances, automated deductions to payouts have been made for assumed pre-existing injury.

This significantly deprived cautious drivers who had taken care of their automobiles and made it arduous for them to purchase like-for-like replacements.

Insurers have now overhauled their claims processes in step with the regulator’s Client Obligation.

Sarah Pritchard, deputy chief government of the FCA, stated: “We’ll step in when customers aren’t getting honest worth – and we're happy to see that the practices which led to some unfair payouts have already modified.

“This implies hundreds of motorists are getting again what their automobile was actually price, in circumstances the place automobiles have been stolen or written off. When you’re owed compensation, your insurer will contact you, or can have already accomplished so – there’s nothing it is advisable to do.”

Clients who're due compensation might be contacted by their insurer.

For anybody else who's dissatisfied with how a declare is dealt with, they need to communicate to their insurer first after which contact the Monetary Ombudsman Service (FOS) if they aren't happy with the response, the FCA stated.

It added that prospects don't want to make use of a claims administration firm (CMC) to complain or make a declare.

The modifications made to claims practices comply with motion from the FCA on car valuations.

In December 2022, the FCA warned insurers to not undervalue automobiles and different insured gadgets when settling insurance coverage claims and set out its expectations for companies when dealing with claims.

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In March 2024, the regulator revealed a multi-firm overview which recognized shortcomings in insurers’ valuation of automobiles. It engaged straight with companies with points and dedicated to investigating additional.

In June 2023, the FCA revealed a voluntary requirement in relation to car valuations on the Monetary Providers Register. This required Direct Line Group to overview 5 years of claims outcomes and pay redress the place acceptable. The requirement has since been eliminated.

In August 2025, Admiral introduced it had put aside £50 million to compensate prospects who weren't given a good settlement when claiming for stolen or written off automobiles.

The FCA’s Client Obligation requires companies to behave to ship good outcomes for customers, and that they're supported whereas utilizing a monetary product, together with once they make claims.

A spokesperson for the Affiliation of British Insurers (ABI) stated: “Insurers work arduous to ship the absolute best service for his or her prospects.

“There was lots of volatility within the second-hand automobile market in recent times which created challenges for insurers when attempting to set valuations.