Partially upheld: claim valuation and VAT treatment on total loss settlement complaint against Admiral Insurance (Gibraltar) Limited

Decision detail

Summary

Mr R claimed on his commercial vehicle insurance policy following an accident that resulted in a total loss. Admiral valued the vehicle at £7,347 and after deducting salvage value and excess, paid Mr R £4,783.72. Mr R disputed the valuation, believing the vehicle was worth £12,000, and complained about the salvage deduction and lack of transparency regarding salvage rates. The ombudsman found Admiral's valuation was fair and reasonable based on industry valuation guides and that the salvage deduction was appropriate, but upheld the complaint regarding VAT, which should have been added to the settlement amount since Mr R could not claim it back through a VAT registered business.

The Ombudsman's reasoning

The ombudsman found Admiral's valuation of £7,347 was fair and reasonable based on valuation guides and policy terms, despite Mr R's evidence of similar vehicles advertised at higher prices, because those advertised vehicles had significantly lower mileage (less than half of Mr R's 247,000 miles) which materially affects value. However, the ombudsman determined that VAT should have been added to the settlement because the engineer's report explicitly stated the examples used were 'NO VAT' and Mr R, as a non-VAT registered individual, could not reclaim the VAT. The salvage deduction was found to be reasonable and in line with standard insurance practice and Admiral's agreed rates.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website