Not upheld: Motor insurance, total loss valuation complaint against Aviva Insurance Limited

Decision detail

Summary

Mr B complained that Aviva undervalued his car at £1,737 following a total loss claim and that the 30% salvage deduction (£521.10) applied when he chose to retain the vehicle was unfair. Aviva used the CAP valuation guide and comparable advertised vehicles to arrive at its valuation. The FOS investigator and ombudsman both found the valuation fair, as it exceeded valuations from multiple trade guides and was supported by market data. The ombudsman also found the 30% salvage deduction was consistent with standard industry practice and reflected the amount Aviva would have received from its salvage dealer. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FOS approach of assessing whether the insurer applied policy terms correctly and valued the vehicle fairly, rather than determining the exact value. Valuing used cars is not an exact science, and the FOS places greater reliance on motor valuation guides (based on national research of likely selling prices) than on advertised prices (which can vary widely and represent asking rather than actual selling prices). Aviva's approach of using one guide plus comparable advertised vehicles was fair and reasonable. The resulting valuation of £1,737 was higher than the highest guide valuation (£1,625) and fell within a reasonable range given the market data. The 30% salvage deduction reflected the amount Aviva would have received from its salvage dealer and is standard industry practice when a policyholder retains a written-off vehicle.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website