Not upheld: Motor insurance, total loss valuation complaint against Marshmallow Financial Services Ltd

Decision detail

Summary

Mr H claimed on his motor insurance policy following a total loss accident. Marshmallow offered £3,800 settlement (less excess and outstanding premiums), but Mr H believed his car was worth approximately £4,500 based on advertised prices and was also unhappy with the service received. Marshmallow acknowledged service failings and offered £375 compensation. The ombudsman found the settlement valuation was fair as it matched the highest motor guide valuation and was supported by market research, while the advertised comparables Mr H provided had lower mileages and different specifications. The £375 compensation was deemed appropriate for the service failures experienced over approximately one month.

The Ombudsman's reasoning

The ombudsman applied the principle that market value should be assessed as the price a consumer would have paid for a comparable vehicle immediately before loss. Given current market volatility, the ombudsman expects insurers to pay the highest valuation from motor guides unless evidence supports a lower figure. Marshmallow's offer matched this highest valuation and was supported by market research. The advertised comparables Mr H provided were not truly comparable due to lower mileages and different specifications. The policy terms clearly permitted deduction of the excess and outstanding premiums. The £375 compensation aligned with FOS guidance for service failures affecting a consumer over approximately one month.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website