Not upheld: claim settlement valuation - undervaluation of total loss vehicle complaint against Society of Lloyd's

Decision detail

Summary

Mr E complained that Lloyd's undervalued his luxury performance car when settling a total loss claim following a fire, initially offering £43,000 and later increasing to £53,000, when he believed it was worth at least £58,000. The car was approximately 19 years old, left hand drive, and not UK registered, making it uncommon and not listed in standard trade guides. The ombudsman found Lloyd's valuation of £53,000 was reasonable and fair, considering the vehicle's characteristics, comparable market evidence, and the distinction between advertised and actual sale prices. The ombudsman rejected Mr E's arguments regarding driving habits and the policy schedule valuation, clarifying the policy was a market value policy rather than an agreed value policy.

The Ombudsman's reasoning

The ombudsman assessed whether Lloyd's handled the valuation fairly and reasonably rather than attempting to value the vehicle independently. The ombudsman found that Lloyd's £53,000 valuation was reasonable given: the car's average condition, left hand drive specification, lack of UK registration (which creates legal and administrative barriers), and comparable market evidence. The ombudsman noted that advertised prices are not sale prices and many include negotiation room. The ombudsman rejected Mr E's arguments that his driving habits should increase value and that the policy schedule's £58,000 figure represented market value, clarifying it was a market value policy not an agreed value policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website