Not upheld: unfair settlement valuation on total loss claim complaint against One Insurance Limited

Decision detail

Summary

Mrs W complained that One Insurance undervalued her car following a total loss claim, offering £5,060 when she had purchased it for £8,000. One Insurance initially applied a 20% deduction based on a previous total loss designation, but removed this after Mrs W provided evidence. The ombudsman found One Insurance's final settlement offer of £5,060 (the highest valuation guide) was fair and reasonable under the policy terms and industry practice. The ombudsman rejected Mrs W's argument that purchase price should determine settlement value, noting that market value and purchase price are not necessarily equivalent. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the policy definition of market value and confirmed that One Insurance's use of industry valuation guides is standard practice and not unreasonable. The ombudsman noted that good practice requires paying the highest valuation guide unless evidence suggests it does not fairly reflect the car's value. One Insurance offered £5,060, which was the highest guide. The ombudsman rejected Mrs W's argument that the purchase price of £8,000 should determine the settlement, explaining that purchase price does not necessarily equal market value. The ombudsman found that Mrs W could replace her car with the settlement offered, as cars are available for sale at that price point.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website