Motor insurers to pay £200m after shortchanging customers
About 270,000 drivers will receive £200m in compensation after the FCA found motor insurers had underpaid policyholders for stolen or written-off vehicle claims.
The backdated payouts for historic claims come after insurers overhauled settlement practices in line with Consumer Duty regulations following the FCA ruling.
The FCA review found that some insurers made automatic reductions for assumed pre-existing damage, which unfairly disadvantaged careful drivers and made it difficult to find like-for-like replacements.
Sarah Pritchard, deputy chief executive of the FCA, said: “We’ll step in when consumers aren’t getting fair value, and we are pleased to see that the practices which led to some unfair payouts have already changed. This means thousands of motorists are getting back what their car was really worth, in cases where cars have been stolen or written off.”
Eligible customers will be contacted directly by their insurer, but unsatisfied policyholders have been advised to contact the Financial Ombudsman for further support.
To date, compensation totalling £129m has now been paid to nearly 150,000 motor insurance customers.
