Consumers sometimes contact us to complain that their insurer hasn’t paid them enough when their vehicle has been written off. Others are unhappy that their insurer has decided to scrap their vehicle without telling them first.
When we consider a complaint, we’ll look at all the evidence and facts to decide what a fair outcome should be.
What is a write-off?
Insurers sometimes call a write-off a ‘total loss’. A vehicle might be written off because:
- it isn’t worth the cost of repairing it
- it’s been stolen and never found
If your vehicle’s been written off, your insurer will usually pay out its market value. This is the amount your vehicle would have been worth just before it was stolen or damaged.
Types of complaints we see
You might complain because your insurer:
- hasn’t paid you a fair price for your vehicle
- has written off your vehicle without telling you first
We need to investigate the complaint and decide whether your insurer has done anything wrong.
What we look at
When looking into these types of complaints, to help us consider it fairly we might ask you and your insurer for certain information, for example:
- independent engineer or expert reports – including any details of modifications to the vehicle
- copies of valuations
- evidence of any pre-existing damage and the cost to repair
- vehicle history
In reaching a decision, we consider:
- the relevant law
- any regulations that applied at the time
- any industry codes of conduct in force at the time
Read more about what we look at for specific types of complaints:
If you think the vehicle valuation is unfair
Most of the complaints we see involve disagreements about the market value of the vehicle.
You may have been asked to estimate your vehicle's value when you completed the insurance application form. But this isn't the amount your insurer would actually have to pay out in a claim.
To decide whether your insurer's valuation is reasonable, we’ll look at specialist online trade guides for an indication of what a fair valuation should be. If your insurer’s valuation is in line with the trade guides, we’re likely to agree with it. But if we think the valuation is unfair, we’ll tell your insurer to adjust it using the guide prices.
There are some vehicles that the trade guides don’t cover, including:
- vehicles over 20 years old – this might be less for some models
- less common or unusual vehicles, such as agricultural machinery
- conversions, such as ice-cream vans or campers
If we’re not able to use the guides to work out a fair valuation, we’ll ask you and your insurer for other information, such as an engineer’s report.
We don’t normally use adverts to decide whether a valuation is fair. This is because vehicles often end up selling for a lower than they were advertised. We also find that differences in mileage or year of registration can have a big effect on the value of the same model of vehicle.
However, we might consider adverts if the complaint involves a classic or rare model, or if they strongly suggest that the trade guides could be wrong.
You might think your insurer has undervalued your vehicle, because you’ve had modifications done to your vehicle or it had optional extras that haven’t been taken into account.
A lot of modifications and optional extras won’t have much effect on the second-hand of the vehicle compared with trade guide prices. Adding a satnav, for example, or modifications that have been made to keep your vehicle roadworthy, like replacing the engine.
Some people tell us they’ve added things like spoilers or racing exhausts to their car. Although these might increase the car’s appeal to some people, they could put others off. So on balance, the overall market value might not be any higher.
There may be cases where we think that the particular quality of an accessory would increase a vehicle’s value. But these vehicles are often specially insured through an agreed-value policy, which would have already taken this into account.
Insurers might take off money from the market value of the vehicle if it’s left-hand drive. Left-hand-drive vehicles are usually worth less in the UK, so we’d normally say it’s fair for your insurer to deduct up to 20%. If it’s an imported right-hand-drive vehicle, the deduction should be 10%.
We may decide that the deduction shouldn’t be applied if the left-hand drive vehicle is a classic car. This is because:
- this type of vehicle is normally insured under an agreed-value policy
- this may be a feature on certain cars – for example, if you own a 1950s Cadillac, the fact that it’s left-hand-drive may be seen as a feature to a specialist market
Vehicles recently purchased second-hand
If you bought your car second-hand just before you made the claim, we’d still expect your insurer to have used the guides to make a valuation.
The guides should give an accurate valuation, but it may be that you paid more than the guides suggested it was worth.
‘Agreed-value’ policies require an insurer to pay their customer a previously-agreed amount for the insured vehicle. These policies aren’t very common and are normally only used for valuable or classic vehicles.
If your vehicle is insured under an agreed-value policy and is written off, we’d expect your insurer to pay out the amount that was agreed in the policy.
If the insurer says your vehicle wasn’t in a good condition, but you disagree
We hear from people who say they’ve been told their car wasn’t in good condition, and they’ve been offered less money than they expected.
Under most motor insurance policies, the insurer is only liable for the market value of the vehicle just before it was damaged or stolen. A vehicle’s market value will be affected if it’s not in good condition, so it’s understandable that an insurer might take off money because of pre-existing damage. However, we see disagreements around whether the:
- reduction is justified
- amount deducted is fair
We’ll look at engineers' reports for information about your vehicle’s condition. We’d probably disagree with a lower valuation if the engineer hasn’t given any specific reasons, or for wear and tear that would be expected in a car of that age.
A lot of policies say that a vehicle must be in a ‘roadworthy’ state. If your claim has been affected because your vehicle wasn’t in a roadworthy condition, we’ll look for evidence that any loss or damage was caused because of this.
If we find that your vehicle didn’t have a valid MOT and would have failed one, we’d probably say it’s fair for your insurer to make a small deduction from the valuation.
We see complaints where the insurer has reduced the payout because of damage which was already on the vehicle before the incident happened.
We’d only consider this to be fair if the pre-existing damage would have affected the vehicle's market value. For example, small scratches might affect the value of a brand new vehicle, but not one that is 15 years old.
Vehicles that have been written off in the past
Vehicles that have been previously written off can put off potential buyers, no matter how well they’ve been repaired. This will affect the market value of the vehicle, so insurers are likely to lower the valuation.
If you knew or should have known you were buying a repaired write-off, you probably would have paid less for it. So in these cases, we may decide it’s fair for your insurer to make a deduction of up to 20%.
However, if we think it reasonable you were unaware of your vehicle’s history when you bought it, we’re likely to tell your insurer to pay you the full market value.
If your vehicle has been scrapped without warning
After their vehicle has been written off, we people sometimes tell us they:
- didn’t know their car would be scrapped after it was written off
- wanted to keep the written off car or the ‘salvage’
- lost possessions that were inside the car
When a vehicle is written off, the insurer usually owns the salvage once the owner has accepted payment for the full market value. But we don’t think it’s fair for your insurer to scrap your vehicle without telling you. So we’ll check whether you agreed to accept a payment, and if you told your insurer you wanted to keep the salvage.
In some cases, the insurer has paid the market value and returned the damaged, but deducted what they’d have got for the salvage – and the owner is unhappy with what’s been deducted.
We’d normally think it’s fair for your insurer to take off the amount they would have made from selling the scrapped vehicle from the amount they pay you. But we’d ask them for evidence to prove how much they would have got for the salvage.
Complaints involving new vehicle replacements
Most motor insurance policies new vehicles will provide the owner with a new car if:
- theirs is written off within a certain time
- the cost of the repair is more than 60-70% of the current list price
If this isn’t the case, we’ll look for evidence that the insurer made it clear at the point of sale that the most the policy will ever pay is the market value.
In some cases, although the policy says that the insurer will provide a replacement vehicle, the owner wants the money instead. We’d usually say that money should only be paid to the amount a like-for-like replacement would have cost your insurer.
Sometimes an insurer says that the cost of repairs is less than 60-70% of the current list price, so they won’t offer a replacement vehicle. If this happens, we’ll check that the cost of repairs has been worked out fairly.
Your insurer may have refused to provide you with a new vehicle replacement, if you have a personal contract purchase (PCP) or hire purchase agreement. This is because the finance company is the owner of the car until the you make the final payment. In these circumstances, we’d say your insurer should provide a new vehicle replacement as long as it was agreed with the finance company.
How to complain
Talk to the business first. They need to have the chance to put things right. Explain to the business what's happened and why you're complaining. They have to give you their final response within eight weeks for most types of complaint. If you’re unhappy with their response, or if they don’t respond, let us know.
Find out more about how to make a complaint.
Putting things right
If we find you’ve been treated unfairly, we'll ask the business to put things right. This usually involves putting you back in the position you’d be in if things hadn’t gone wrong. It'll depend on the nature and type of complaint.
If we decide your insurer's valuation was unfair, we’d normally tell them to increase it. We might also tell them to add interest on top of this.
If your vehicle was scrapped without your consent, we’ll look at how this affected you. We might tell your insurer to compensate you for any distress or inconvenience that this caused, as well as for any items that were inside the car when it was scrapped.
Read more about how we award compensation.
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