Car write-off payout - value on schedule vs. market value

studentgti

Hi all

I've got a quick query regarding an issue I'm currently having with my car insurance company regarding a payout for vehicle write-off. I suspect I might be a bit stuck (and definitely should have paid more attention to the fine print) but wanted to canvas some opinion...

- Had an accident in the car in the wet ~2 months ago. Fault claim/nobody else involved.
- Claim accepted by insurer and following assessment of vehicle decided the car was a write-off as uneconomical to repair.
- Insurance now saying they will only pay out the value noted on the schedule of insurance (this is just a standard policy, not agreed value). Upon checking policy docs it does indeed state they will payout market value up to that noted in the schedule.
- Currently waiting for underwriter to confirm their position as this value is ~50% less than current market value of vehicle.


Now I appreciate I should have looked through the docs with a fine-tooth comb, however in my defense:

- When I took the policy out through a broker last Xmas I specifically questioned this point with the broker and was told I would get market value and they just needed to know what I'd paid for the car. I got it at a very good price due to work that needed to be done (and I have completed this year), and the market for these cars has risen significantly, meaning I can't get a replacement for anywhere near the amount they are offering.
- At no point in the phone call did anyone mention that the purchase price I declared would be the limit of any claim - in fact I don't think I've ever had a policy that worked like this before.
- Should I be responsible for monitoring the market throughout the year for the car and pro-actively updating my insurance every time there is an increase? Probably a rhetorical question but definitely food for thought.


Apologies for the long winded post but it's causing me quite a bit of stress at the moment!

Any advice or similar experiences would be much appreciated.

Best

James

Quentin

Your way forward if this turns out badly will be to complain to the insurer about their unfair policy condition (the one they are relying on now not to pay market value) then if you are unhappy with their reply escalate the complaint to the FOS at no cost to you for their adjudication

At the same time you can raise a complaint against your broker for misleading you.

Aretnap

http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html

In particular see this bit

We are likely to award the consumer the full retail value – even if they inadvertently underestimated 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 or theft.

studentgti

Thank you both for your quick replies - much appreciated.

The bit below is particularly good - I had been reading through the FOS website but seemed to have missed that paragraph. Fingers crossed the underwriter plays ball but definitely good ammo to use in a complaint ahead of referring the case.

Aretnap wrote: »

http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html

In particular see this bit

Quentin

They are relying on the condition in the policy regarding the maximum they pay (and not your incorrect valuation), and that is what you need to complain about (ie that the condition is unfair) to the insurer (if they do stick to the letter of their policy condition)

studentgti

Thanks Quentin. That makes sense - is there a good precedent for this kind of thing being considered an unfair condition? Just trying to get as much research done as I can at the moment...

Quentin

If they do stick to their condition, then you will have to await the outcome of the FOS adjudication. (If they have dealt with a similar complaint they may have a precedent)


The only downside for you is the long time it will take to be concluded.