Upheld: Motor insurance, total loss valuation complaint against Tokio Marine Kiln Insurance Limited
Financial Ombudsman decision DRN-3498024 of 2022-05-25T00:00:00+00:00. Motor insurance, total loss valuation complaint against Tokio Marine Kiln Insurance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-3498024 |
|---|---|
| Decision date | 2022-05-25T00:00:00+00:00 |
| Firm | Tokio Marine Kiln Insurance Limited |
| Product | GAP / warranty insurance |
| Claim type | Motor insurance, total loss valuation |
| Outcome | Upheld |
| Remedy | Recalculate settlement using an average of dealership offers provided by Mr N from around the time of loss; add 8% simple interest from date of loss until date of payment; pay total compensation of £300 (£200 for paintwork mis-advice plus £100 additional for stress and inconvenience). |
Summary
Mr N claimed under his GAP insurance policy after his car was written off. TMK valued the replacement vehicle using one dealership quote, but this was out of line with other valuations and the dealership would not sell the car to Mr N at that price. The ombudsman upheld the complaint, finding TMK's valuation methodology unfair and requiring recalculation using an average of multiple dealership offers from the time of loss, plus 8% interest and £300 total compensation for the valuation error and mis-advice regarding paintwork costs.
The Ombudsman's reasoning
The ombudsman found that TMK's reliance on a single dealership valuation was unfair because: (1) the other two quotes were for a lower specification vehicle; (2) the dealership would not actually sell the car to Mr N at that price; (3) the policy requires use of the 'nearest equivalent vehicle' price, not a single dealership quote; and (4) Mr N could not have purchased the car even if offered more money. Using an average of multiple dealership offers represents a fair valuation of the nearest equivalent vehicle as required by the policy terms.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Tokio Marine Kiln Insurance Limited, all decisions | 8 | 38% |
| Motor insurance, total loss valuation, all decisions | 3,418 | 34% |
| GAP / warranty insurance, all decisions | 915 | 39% |
Source
Read the original decision on the Financial Ombudsman Service website