insurance company value more than paid

ellspacer

I got a car for a real bargain at £1000 , I spent a few hundred fixing it up and putting it through the MOT, it got stolen and has been written of. The insurance company rang today to tell me they have valued it at £2000.

Does anyone know will I be paid the amount I paid or the value of the car, I never thought to ask when talking to the insurance company.

dacouch

They should normally pay you the value of the car

ioscorpio

It depends what you declared the value as, when you took out your policy. If you only put the value at £1000, the insurance co. will only pay up to that value.

dacouch

ioscorpio wrote: »

It depends what you declared the value as, when you took out your policy. If you only put the value at £1000, the insurance co. will only pay up to that value.

Thats not correct

Annisele

The Financial Ombudsman Service publishes a technical note on motor vehicle valuation here.

From that link:

We are likely to award the policyholder the full retail value, even if he/she inadvertently under-estimated the value of the vehicle when filling in the proposal form or luckily bought the vehicle for less than it was worth. And we have seen exceptional cases where a vehicle’s value genuinely rose between the date it was bought and the date of the damage/theft.

ioscorpio

I used to work for an insurance co. settling claims and if someone undervalued their car, they were not paid the true value.

dacouch

ioscorpio wrote: »

I used to work for an insurance co. settling claims and if someone undervalued their car, they were not paid the true value.

If you did then you were going against the Ombudsman's rules which you are should have followed Annisele kindly posted the relevant part from the Ombudsman's notes.

Here is the link to the relevant rules, see section 2 http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html#13

dunstonh

I used to work for an insurance co. settling claims and if someone undervalued their car, they were not paid the true value.

Firms may have done that in the past but when the FOS issues rulings and decisions, firms typically monitor those and adapt to comply with those rulings (or find ways to avoid being put in the same position).

Financial services moves so quickly and because the FSA is rubbish at making things clear (which is ironic given the name of their consumer website), firms often interpret the guidelines differently and its only when complaints are made that firms realise whether they have been doing it right or wrong. I think you will find most of those that work in any area of financial services will tell you that there are things they do today that are diferent to what they did a year ago (often on the back of FSA thematic reviews or FOS rulings).

ellspacer

Thank you for all your replies -just to let you know insurance company paid out based on their valuation and not the price I paid

Sally_A

That appears to be a quick and good payout, which insurer was it? It is nice to hear of some decent insurers for a change on here.

newbie007_2

They didn't overpay, its the current value of the car. I once bought a bmw for £2k, about 15months later had an accident, payout was £2.8k.