Insurer Undervalued Your Written-Off Car? How to Challenge It
When your car is written off, your insurer must pay you its 'market value', what it would cost to replace with a comparable vehicle just before the loss. Insurers routinely make a first offer that's lower than the true market value, often leaning on a single trade guide. You don't have to accept the first figure. With the right evidence you can push back, and if they still won't pay a fair amount you can take it free to the Financial Ombudsman Service, which has been firmly critical of lowball valuations.
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Your policy entitles you to the car's market value at the time of loss. The Financial Conduct Authority warned insurers in December 2022 not to undervalue vehicles when settling claims, and its 2024 multi-firm review found some firms were offering less than a vehicle's fair market value and only increasing offers when customers complained. The Financial Ombudsman Service's long-standing approach is that insurers should not simply pick the lowest trade guide. The FOS expects insurers to consider the leading motor trade guides (such as Glass's, CAP and Percayso/Autotrader-type valuations) and, where guides differ significantly, to rely on the highest valuation unless there is good evidence-based reason not to. Advertised prices for genuinely comparable vehicles are strong supporting evidence. You complain first to the insurer; if they don't resolve it within 8 weeks or you're unhappy with their final response, you can refer it free to the FOS within 6 months. The FOS can order the insurer to increase the payout and add 8% simple interest for the delay.
Step by step
- 1Don't accept the first offer. Ask the insurer in writing to explain exactly how they calculated the figure and which trade guides and valuations they used.
- 2Build your own evidence: print adverts for the SAME make, model, age, mileage, specification and condition currently for sale, and run valuations on the main motor trade guides. Keep dated copies, aim to show the realistic replacement cost just before the write-off.
- 3Submit a written complaint setting out your evidence and the fair market value you believe applies, referencing the FCA's warning on fair value and the Ombudsman's approach of not relying on the lowest guide. Request an increased settlement.
- 4If the insurer refuses or doesn't resolve it within 8 weeks, refer the complaint free to the Financial Ombudsman Service within 6 months of their final response, attaching all your comparable adverts and guide valuations.
What they'll say, and your comeback
“Our valuation is based on our trade guide, so it's final.”
Comeback, A single trade guide isn't conclusive. The Financial Ombudsman expects insurers to consider all the leading guides and, where they differ significantly, to rely on the highest figure unless there's good evidence-based reason not to. I've provided comparable adverts showing a higher market value.
“Advertised prices are just asking prices, not real values.”
Comeback, The market value is what it would cost me to replace the car like-for-like, and the cars actually for sale are the market I'd have to buy from. The Ombudsman treats genuinely comparable adverts as strong evidence of fair value, especially where they exceed your guide figure.
“We've deducted for condition and mileage, so the lower figure stands.”
Comeback, Any deduction must be justified with evidence, not applied as a blanket reduction. If you're reducing the payout below the guide and advert figures, you need to show specific, documented reasons. Otherwise the deduction is unfair and I'll ask the Ombudsman to review it.
FAQ
Can I still drive a hard bargain if I've already accepted the offer?
It's harder once you've accepted, but not always impossible, especially if you accepted under pressure or without the information to judge it. Raise a complaint quickly explaining why the settlement was unfair, and the Ombudsman can still consider it within the time limits.
What evidence carries the most weight?
Adverts for genuinely comparable vehicles (same model, year, mileage, spec and condition) on sale around the date of loss, plus valuations from several leading motor trade guides. The closer the match, the stronger your case for a higher payout.
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A self-serve tool, not a law firm. General information, not legal advice.