Out of pocket after car insurance claim

MissDaisy16

I was hit by a third party in December 2023.  I contacted my insurance provider (a broker) who offered to handle the claim through their claim management company.  My car was deemed a economic total loss but roadworthy.  Following a desktop based assessment it was deemed a unroadworthy total loss.  The car was valued at £2710 and I was asked for my bank details for the payment, which I sent.

As I need a car for work, I looked for and bought a new car.  However, on the day that I bought it, I found out that the claim company had rejected the claim (as they do not deal with total losses) and that I would need to instead restart the claim with my actual car insurance provider, which I did.  My actual insurer was fantastic throughout the process.  However, after an physical assessment they stated that not only was my car roadworthy but it was also repairable.

Long story short, I am massively out of pocket.  I could not cancel the car purchase so had to proceed.  My old car was repaired but is now sitting on my driveway.  I can sell it but i would not get close to what it was valued at by the insurer.  I would "lose" close to £1000.  To top it off, if I sell my new car (which I have no need for now) I would lose over £2000.  

I have complained to my broker, who have admitted that they made several fundamental errors in the handling of my case (including not knowing who asked for my bank details for the total loss payment when the claim, unbeknownst to me, had already been rejected).  However, they have only offered £300 in compensation.  I tried a complaint through the Financial Ombudsmen by they said they could not deal with complaints again Claims companies.

I would like advice on whether I should pursue this through the Small Claims Court or if I should just accept the £300.

Mark_d

Your broker has admitted fundamental errors and as a result you are thousands of pounds out of pocket.  I would certainly be seeking legal advise as to how best to recover the loss through the small claims court

SaverRate

Accept the £300. One could argue you should have waited until the money hit your bank account. 
Also where are you selling it to lose £1000, have you looked around to compare what prices places would give you? 

MissDaisy16

SaverRate said:

Accept the £300. One could argue you should have waited until the money hit your bank account. 
Also where are you selling it to lose £1000, have you looked around to compare what prices places would give you? 

Thanks for the comment.  I have tried several sites.  WeBuyAnyCar only value it at £690 and AutoTrader value it at £1590 if I sell privately.  I was surprised by the insurance valuation but they based it on a car dealer's retail price, not what I could sell it for.

[Deleted User]

I'd send a letter before action, and then proceed to Small Claims Court. It doesn't cost much and if you can show that they gave you bad advice or admitted they made mistakes (ideally in writing) then you shouldn't have too much trouble winning.

The main issue will be that you need to dispose of one of the cars, so you know exactly how much you have lost. Maybe send the letter, and if they don't pay up then sell one of the cars and proceed to court.

No need to pay for legal advice with Small Claims Court.

born_again

Are the claims co FCA regulated. If so then complaint & then take it to FOS if they do not payout. 

But you may not still get a payout.

Kim_13

SaverRate said:

Accept the £300. One could argue you should have waited until the money hit your bank account. 
Also where are you selling it to lose £1000, have you looked around to compare what prices places would give you? 

The car presumably has an N or an S category on it now, which reduces its value. The £2710 would have been what the insurers deemed it to be worth in the moment before the collision, without any such category. 

If there isn't one, I'm wondering how a car worth so little doesn't get one in these times of increased component costs.