Write off capped at estimated value

Quentin

mr_megs wrote: »

I honestly didn't think my valuation would affect the policy. I should have read the t&cs I know.

Your valuation didn't affect the "policy". It is as you have read,


But the "premium" could well have been affected because of your valuation.


You cannot now complain about the offer they have made (as it's covered by the policy condition you have quoted).


You now look to have to win a complaint that the policy condition is unfair.

cajef

You undervalued it by £1,900 not £800, nearly half what you paid for it.

magpiecottage

mr_megs wrote: »

They sent me a link to my documents when I took out the policy and when I looked at them I (stupidly) didn't save them. Now they refuse to reissue them unless I pay £20! I saved my policy just not the t&cs.

If the OP takes the insurer to the Financial Ombudsman Service, they will have to produce the terms and conditions if they want to attempt to rely on them. That will not cost the OP anything.

With regard to whether FOS would consider the OP, who is presumably not an industry expert, valuing a bike as £2,000 when its real value is £2,800, I think it would probably side with the consumer. It does not seem fair or reasonable to expect somebody who had no intention of parting company with his machine to make a detailed investigation of what he might reasonably expect to get for it.

With that in mind, I think, too, that for the insurer to attempt to apply its customer's guess if it is lower than what it really knows the value to be is unfair within both the context of the Unfair Terms in Consumer Contracts Regulations 1999 and the sixth Principle of the FCA Handbook.

So I think if the complaint is not upheld by the insurer, the OP ought to escalate it to FOS.

Quentin wrote: »

If you were insuring your million pound house for half it's value would you expect the full value to be paid you if there was a catastrophic fire which burnt it down?

I accept this up to a point, Quentin. However, house insurance is arranged on the basis of rebuilding cost, not market value and modern policies tend to be either unlimited or set at a limit which is clearly in excess of the rebuilding cost.

nidO

magpiecottage wrote: »

With regard to whether FOS would consider the OP, who is presumably not an industry expert, valuing a bike as £2,000 when its real value is £2,800

The thing is, from reading the OP, I take it as they gave the insurer the £2000 value at the time they bought it and therefore first insured it.
This therefore isn't a difference in £2000 to £2800 when guessing the value of the bike now out of thin air, its the difference between £2000 and £3900 18 months ago when they know this is what the bike was worth as it's what they just paid for it.

Aretnap

magpiecottage wrote: »

I accept this up to a point, Quentin. However, house insurance is arranged on the basis of rebuilding cost, not market value and modern policies tend to be either unlimited or set at a limit which is clearly in excess of the rebuilding cost.

Plus there's the fact that houses tend to be fairly unique and the rebuild cost can vary substantially depending on the size and style of house. The value of the contents can vary from almost nothing to six figures or more depending on the customers tastes and wealth. The insurer has no easy way of knowing those figures so it's reasonable of them to rely on the customer's estimate, and ask the customer to do his homework if necessary.

OTOH the value of most cars is fairly well defined. An insurer doesn't really need to ask the customer how much a five year old Fiesta is worth - they probably already have a better idea of its value than the average customer does. So I don't think the comparison with home insurance is particularly useful, and the term strikes me as unfair. Certainly is a unusual excision so even if it is fair it should have been clearly pointed out to the OP at the time he bought the policy, not just buried on page 24 of the terms and conditions.

magpiecottage

Aretnap wrote: »

Certainly is a unusual excision so even if it is fair it should have been clearly pointed out to the OP at the time he bought the policy, not just buried on page 24 of the terms and conditions.

And that in itself is likely to amount to a breach of FCA Principles 6 and 7 (treating customers fairly and having due regard to their information needs). That will then incur the displeasure of FOS.

So I think there is a division of opinion here between those who say the OP is culpable and those who think FOS might well take a different view.

The only way we'll find out is if the OP goes to FOS and comes back to report the outcome.

rs65

OP, when did you take out the policy?


When did you buy the bike?


Have you changed insurer since?

mr_megs

Hello again,

Just to keep you updated, I took it to the FOS and they have ruled in my favour:

Based on the policy terms I believe the policy is both a market value and an agreed value policy. I think these terms are contradictory and will always lean in favour of the insurer and allow the insurer to choose the lower value to pay out, I therefore consider it unfair. It was also not made clear when the consumer was asked to input the vehicles estimated value that this figure was to be used as a payout cap which does not pay due regard to his informational needs.

The FOS has told them to pay the market value of £3225 + 8% for every month since the first offer was received + £200 for distress and inconvenience.

They have 3 weeks to appeal, do you think they will?

superbigal36

It's certainly good to see that some of the "know alls" got it wrong.
Well done.

takman

superbigal36 wrote: »

It's certainly good to see that some of the "know alls" got it wrong.
Well done.

There is a general trend of consumers who don't have "financial common sense" getting extra protection from their mistakes. So decisions like this are probably to be expected!.