Partially upheld: Motor insurance, total loss valuation complaint against Marshmallow Insurance Limited
Financial Ombudsman decision DRN-6459794 of 2026-06-29T00:00:00+00:00. Motor insurance, total loss valuation complaint against Marshmallow Insurance Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6459794 |
|---|---|
| Decision date | 2026-06-29T00:00:00+00:00 |
| Firm | Marshmallow Insurance Limited |
| Product | Motor insurance |
| Claim type | Motor insurance, total loss valuation |
| Outcome | Partially upheld |
| Remedy | Marshmallow must settle Mr S's claim at a market value of £2,350, subject to remaining policy terms and conditions. Interest at 8% simple must be added to the balancing figure from the date the claim was settled to the date of payment. If HMRC requires income tax deduction, Marshmallow must inform Mr S and provide a tax deduction certificate upon request. |
Summary
Mr S complained about Marshmallow's handling of his car insurance claim following a January 2025 collision, disputing both the liability determination and the vehicle valuation of £2,150. Marshmallow assessed Mr S as at fault and offered £225 compensation for poor communication. The ombudsman found that while Marshmallow's liability decision was fair (as Mr S drove into a stationary vehicle), its valuation methodology was incorrect. The ombudsman directed Marshmallow to settle the claim at £2,350 (the highest of three valuation guides) plus 8% simple interest on the balancing amount, but upheld the liability determination and compensation level.
The Ombudsman's reasoning
The ombudsman applied the FOS approach of using the highest valuation guide figure (£2,350) as the market value, rather than Marshmallow's figure of £2,150. This service's methodology requires using the highest guide value unless either party provides evidence to dispute it. Regarding liability, the ombudsman found Marshmallow acted fairly in determining Mr S was at fault, as he drove into the rear of a stationary vehicle and drivers are expected to maintain safe distances and anticipate stops on roundabouts. The ombudsman noted that without independent evidence (such as CCTV) demonstrating the third party's negligence, the fault determination was reasonable. The £225 compensation for service failures was deemed appropriate.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Marshmallow Insurance Limited, all decisions | 152 | 57% |
| Motor insurance, total loss valuation, all decisions | 3,483 | 35% |
| Motor insurance, all decisions | 24,103 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website