Not upheld: claim settlement valuation, write-off decision, salvage handling complaint against Advantage Insurance Company Limited

Decision detail

Summary

Mr T complained about how Advantage Insurance handled his motor insurance claim following damage to his car. Advantage assessed the car's market value at £2,695, declared it a total loss, placed a write-off marker on it, and took possession of the salvage. Mr T disputed the valuation, believing the car was worth over £4,000, and objected to the write-off decision and salvage handling. The ombudsman found that Advantage acted fairly in all respects: the valuation was properly calculated using motor trade guides, the write-off decision was within the insurer's discretion as repair costs exceeded 60-70% of value, early payment of the settlement is fair practice, and the salvage clause is standard and reasonable. The complaint was not upheld, and the £100 compensation offered for a lapse in service was deemed adequate.

The Ombudsman's reasoning

The ombudsman applied the FOS approach to car valuations, which is to determine whether the insurer reached a fair and reasonable amount by reference to motor trade guides and supporting evidence. Advantage's valuation of £2,695 was the higher of two guide values and was properly calculated according to the car's model, condition, and mileage. The adverts Mr T provided were not sufficiently comparable due to differences in specification, mileage, condition, and market position, and cars typically sell for less than advertised prices. The decision to write off the car was within Advantage's discretion under the policy as repair costs exceeded 60-70% of value. Early payment of the valuation amount is fairer practice as it gives the consumer use of the money without preventing them from challenging the amount. The write-off marker is necessary for safety and valuation reasons and is standard industry practice. The salvage clause in the policy is common and reasonable, and Mr T agreed to it when taking out the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website