Poor car insurance payouts leaves Which? calling for the FCA to hold firms accountable

Which? is calling for the Financial Conduct Authority (FCA) to take tougher action to hold firms to account when they offer poor payouts to car insurance customers, as their new research finds a third of insurers were rated poorly by claimants when it came to the value of payouts.

The research also shows that customers are feeling ripped off by their insurers. Eight out of 24 providers scored just two stars out of five for settlement values in Which?'s annual survey. 

Providers only getting two stars for settlement values include: AA, Admiral, Bank of Scotland, First Central, Halifax, Quotemehappy.com, Sainsbury's Bank and Swinton Insurance.

Which? is concerned that some insurers may potentially be giving out much lower payments than they should be when customers make a claim after an accident.

Rocio Concha, Which? Director of Policy and Advocacy, said: “Claiming for a car accident is already a stressful ordeal, but our research suggests it's becoming even more so due to insurers offering low payouts. 

“It's concerning to see that a third of firms analysed are rated poorly by customers for their payout values, despite repeated warnings from the regulator not to undervalue cars when settling claims. 

“There is ample data available to firms and regulators on car values by age, and firms are obliged under the Consumer Duty to demonstrate fair value. The FCA must now insist that firms take action to assure customers they will get a fair price for their vehicle should they need to claim, without undue hassle or needing to complain to get a better offer.”

What should I do if I think my insurer’s offer is too low?

If you think your insurer’s offer on your claim is too low (within reason) you can use Which?’s template letter to reject the offer and ask for a revised offer.

If you’re not satisfied with what your insurer offers, you can complain using your insurers complaints process.