By the time you contact your insurer to report a claim, the incident has already happened. Your car is damaged or may have been stolen. The chances are that you'll be unhappy and the last thing you need is for your insurance policy not to pay you the fair figure that you were expecting.
The FCA issued a warning to insurance companies not to undervalue cars when settling total loss claims at the end of 2022, stating that customers should not need to question the figure being offered, particularly at a time when the cost of living is increasing.
The regulator has not named individual insurers, but we understand that several have begun to take steps to review claims paid since around 2015. It is thought that these are insurers who deal directly with customers and without the involvement of a broker, therefore they are less likely to be involved with specialist vehicles.
However, it does highlight the importance of good policy cover and using a broker who understands the changing and, at times, fluid landscape of the specialist car sector.
We've written about how our Agreed Value cover works before here https://www.locktonperformance.com/news/valuing-your-car-insurance.html but it's worth highlighting below how our policy works in the event that your vehicle is stolen, or cannot be repaired safely.
- Cars up to two years old will be replaced with a new vehicle of the same specification.
- Cars between two and 15 years old and worth up to £750,000 – up to 150% of your agreed value.
- Cars between two and 15 years old and worth more than £750,000 – up to 125% of your agreed value.
- Cars over 15 years old – up to 125% of the agreed value, or £250,000, whichever is less, to repair the vehicle to its pre-accident condition.
We also explained how insurers write cars off here https://www.locktonperformance.com/news/insurance-explained-writing-off-a-vehicle.html although we will always try to get a special car repaired rather than written off.
If your vehicles are insured on an agreed value basis, then this is the figure that you will be paid as a minimum. There will be no argument or attempt by the insurer to reduce this figure when settling your claim and, as you can see above, you will also be protected in event that your car's value exceeds the agreed value.
If you would like to know more, please contact us.
This came after the FCA warned insurance firms in December 2022 not to undervalue cars and other insured items when settling insurance claims.
The regulator said it had seen evidence that some consumers, who had their cars written off after an accident, were being offered a price lower than the vehicle's fair market value.
In a statement, which did not name any insurers, Sheldon Mills, executive director of consumers and competition at the FCA, said: “When making an insurance claim, people shouldn't need to question whether they are being offered the right amount for their written off car or other goods that they need to replace.
”Insurance firms should offer settlements at the fair market value.
”This is especially important now as people struggling with the cost of living will be hit in the pocket at precisely the time they can ill afford it.”