Not upheld: vehicle valuation dispute and salvage value calculation complaint against Alwyn Insurance Company Limited

Decision detail

Summary

Ms A complained about Alwyn Insurance's valuation of her vehicle at £22,246 after it was declared a total loss, arguing it should be worth more based on her purchase price of £25,500 four months earlier and advertised prices of similar vehicles. She also initially complained about the salvage value deduction, which Alwyn corrected and refunded £777.31. The ombudsman found Alwyn's valuation fair and reasonable as it was the highest valuation produced by industry standard guides, which the ombudsman found more reliable than purchase price or advertised prices. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FOS's established approach to valuation cases, checking whether the insurer's valuation was fair and reasonable in line with policy terms. The policy defined market value by reference to industry standard guides. The ombudsman found the valuation guides more reliable than purchase price, advertised prices, or recent purchase history because guides are based on nationwide sales data, whereas advertised prices may be negotiated and purchase price does not necessarily equal market value. Alwyn's valuation of £22,246 was the highest of its guide valuations and fell within a consistent range with the investigator's independent guide valuations, with no outliers. The ombudsman rejected Ms A's arguments based on purchase price and car adverts with lower mileage.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website