FCA finds concerns over insurers’ valuation of written-off or stolen vehicles.

By MICHAEL HANSON
•
04 Apr, 2024

YOUR COMPLIANCE MATTERS: FCA finds concerns over insurers’ valuation of written-off or stolen vehicles.

Relevance: All firms.

Action required: Ensure your teams are aware of FCA concerns and are ready to challenge insurers as needed.

The FCA has published (27.03.24) a press release identifying shortcomings in how some motor insurance firms are valuing written-off or stolen vehicles.

A link to the press release is here https://www.fca.org.uk/news/press-releases/fca-finds-concerns-over-insurers-valuation-written-or-stolen-vehicles

We were already aware of this issue from your anecdotes. You should be ready to challenge insurers where you believe they are under-valuing vehicles.

To quote from the press release:

‘An FCA review has found evidence that suggests some firms are offering their customers less than their written-off or stolen vehicle is worth and, in some cases, are only increasing that offer when a customer complains.

This comes despite the FCA’s previous warnings that insurers must not undervalue cars or other insured items when settling claims.

The regulator is engaging with the firms included in its review to ensure they make improvements to address the FCA’s findings.

Sheldon Mills, Executive Director, Consumers and Competition at the FCA said:

'Having your vehicle written off or stolen can be intensely stressful and we expect firms to offer the right support to help their customers.We expect all motor insurers to take note of our findings and we are engaging directly with those that have issues that need to be addressed.'

Insurers must handle claims promptly and fairly under FCA rules.

Following the introduction of the Consumer Duty in July 2023, firms are also required to ensure consumers are at the heart of their business and must act to deliver good outcomes for them.

Customers who think their claim may have been undervalued can complain to their insurer and then to the Financial Ombudsman Service if their complaint is not resolved.

If you need to discuss any aspect of this matter with us, please make contact in the normal way.

Pricing information report form REP021 All firms should complete this section for:

a) premium finance – for insurers and intermediaries the business where they set the price and where the price is not set by an insurer or an intermediary the business must be reported by the customer-facing firm;
b) add-ons – the business where they set the price; and
c) fees and charges in addition to the premium – the fees charged by the firm.

6.01

Product

• Motor

Tenure

Premium finance

T0

T1

T2

T3

T4

T5

T6

T7

T8

T9

T10+

6.02

Total charged (£) for retail premium finance in the reporting period

6.03

Number of core motor and home and any add-on policies incepted with retail premium finance in the reporting period

6.04

Number of policies incepted/or renewed in the reporting period with

an APR:

Of 0%

Between 0.1% to 9.9%

Between 10% to 19.9%

Between 20% to 29.9%

Between 30% to 39.9%

Between 40% to 49.9%

50% or more

Add-ons

6.05

Total gross written premiums (£) for add-ons incepted or renewed in the reporting period

6.06

Number of add-ons incepted or renewed in the reporting period

Fees and charges in addition to the premium

6.07

Total pre-contractual fees/charges (£) charged to customers in the reporting period

6.08

Average pre-contractual fees/charges (£) per customer who was charged a fee in the reporting period

6.09

Total post-contractual fees/charges (£) charged to customers in the reporting period

6.10

Average post-contractual fees/charges (£) per customer who was charged a fee in the reporting period