The new Direct Line advert

InsideInsurance

wozearly wrote: »

Both advert and policy t&cs indicate the maximum cash offer will never be more than the cost of replacing the item with their preferred supplier. Which is not the same as guaranteeing it always will be the same as the cost to Direct Line. They could, without breaking their own rules, offer you £20 even if their cost to replace is £100, and the market value of a replacement without discounts is £120.

Under the terms they could but the FOS wouldn't go for it.

The discounts they receive from suppliers is volume based and so the more business they push through a supplier the bigger the discounts they can get. There could be an argument therefore that the effective loss of opportunity for large discounts means a £95 cash settlement is fair when their current supplier price is £100 but it really could go either way with the ombudsman, if it were allowed to go that far.

dacouch

wozearly wrote: »

Okay, I see the point you're making.

Both advert and policy t&cs indicate the maximum cash offer will never be more than the cost of replacing the item with their preferred supplier. Which is not the same as guaranteeing it always will be the same as the cost to Direct Line. They could, without breaking their own rules, offer you £20 even if their cost to replace is £100, and the market value of a replacement without discounts is £120.

But you can phrase this another way. Direct Line will offer a cash value which will never be more than a price which the customer can't get which may be the same or less than the market value of the item. It's actually not the world's most meaningful t&c.

Assuming the customer has a free choice of £x or a replacement, it's difficult to see that the Ombudsman would consider this as fundamentally unreasonable.

They also make no explicit reference to how much "cash" would be offered, except to indicate a maximum applies and that it's not necessarily the same as the market price. If they had said "you can have the cash" there might be a stronger case for misinterpretation, as it would imply it was linked to the replacement cost directly. I note that's the wording you've used throughout in describing it and that I unhelpfully used in my paraphrase.

If Harvey had said "You can have some cash" it would technically be more accurate, although it does somehow imply the offer will be derisory, which is probably inviting misinterpretation too far the other way.

It all depends what price they offer, and whether the customer will care given they can turn it down, take the replacement and resell it themselves, if they so choose.

I guess we'll see.

Winston says "your phone can be replaced or you can have cash"

Joe public is regarded to be uninformed when it comes to insurance by the Ombudsman.