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It has been suggested to the Financial Conduct Authority (FCA) to crack down on motor insurance corporations that offer their consumers lower-than-expected payouts.
He called on the monetary regulator to act after revealing widespread dissatisfaction with insurers’ valuations of cancelled or stolen cars.
A third of the UK’s largest suppliers have received poor ratings for the values of their deals, according to a survey by the customer watchdog.
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This comes days after the FCA expressed fears about some tests conducted through motor insurers.
In a study released March 27, the city’s watchdog uncovered evidence of practices it called “unfair,” adding that insurers undervalued delisted or stolen cars and expanded their offerings after a visitor complained.
Auto insurance premiums have skyrocketed over the past two years, and according to recent data, prices have skyrocketed 46% year-over-year. Even drivers with a long history of no claims have been affected by the price increase.
He said the FCA needed to give a boost to its stance in the auto insurance market following its survey of 2,793 policyholders who filed a claim in the past two years.
Conducted in November 2023, the survey found that 8 out of 24 primary insurers earned two out of five stars for their ratings when they filed a claim. The 8 corporations were:
He said NFU Mutual didn’t have a large enough sample to receive a review from visitors and it wasn’t included in their research.
A simple example that the customer watchdog said it noticed concerned a couple who were involved in a car twist of fate in February when another vehicle crashed into their used Kia Sportage, ruling it out.
Although they bought the car for £12,395 in November 2023 – a figure the couple later included in their policy when taking it out – their insurer, Hastings Direct, had previously presented them with £8,400. some other £8,610.
Hastings then asked his own professional to compare the car and made a third and final offer of £9,285. That figure is £3,100 less than the couple had paid and £885 more than the insurer’s first offer.
In response, Hastings Direct told Which?: “Our aim is to resolve claims quickly and based on the existing market price of a delisted vehicle. In this case, we have made an initial offer based on the available data about the vehicle.
“However, after receiving further details about the vehicle, adding an engineer’s report and photographs, we made an updated offer of £9,300 to the couple and they accepted that amount. We apologize for the late payment and are pleased that the couple is satisfied with this outcome.
Hastings Direct is not among the eight auto insurance companies singled out by the customer watchdog in its November investigation.
After its review uncovered evidence of some “unfair” practices in the motor insurance market, the FCA said it was in the process of “working with” the corporations it had examined.
It said it sought to “make sure they made improvements” and “responded” to the conclusions of the regulator’s report. It would appear that the regulator has already taken action against corporations that it believes undervalue auto insurance claims. But MoneyWeek hasn’t. I didn’t notice any evidence of what this app entails and which uncertain people have been affected by it.
But he said additional measures were needed and the FCA’s call was because the insurers it had looked at in its review had been anonymous. Rocío Concha, policy and advocacy director at the consumer watchdog, said: “Reporting a turn in car fate is stressful enough, but our studies suggest it is even more so due to low remuneration from insurers.
“It is worrying that a third of the companies analysed receive poor consumer ratings for their payment values, despite repeated warnings from the regulator not to undervalue cars when settling complaints.
“Companies and regulators have a lot of knowledge about the cost of cars through their age, and corporations are obligated through the customer’s duty to prove their fair cost. The FCA will now have to insist that firms take steps to make sure certain customers get a fair price. value for their vehicle if they have to file a claim, no unnecessary hassle or need to complain to get a better deal.
The FCA did not respond directly to Which?about new measures. Instead, it pointed to a comment made through its executive director for customers and competition, Sheldon Mills, when it published its study. He said: “Having your vehicle cancelled or stolen can be incredibly stressful and we expect companies to offer the right ones to help their customers. We hope that all auto insurers will take note of our findings and interact directly with those who have problems to solve.
Insurance consumers can complain to their provider if they are satisfied with the way a claim has been handled.
The insurer will have to review your claim within 8 weeks.
If you are still satisfied, consumers can lodge a complaint with the Financial Ombudsman Service (FOS) if they feel that a complaint they have made to their car insurer is being dealt with satisfactorily.
Last week, the FOS revealed that it expects to get around 50,000 court cases on auto insurance over the next 12 months.
Henry Sandercock spent over 8 years as a journalist covering a wide variety of fields. After completing a master’s degree in journalism at the University of Kent, he began his career on the turf of England as a reporter for local television station KMTV.
Henry then worked at the BBC for three years as a radio manufacturer, basically on BBC Radio 2 with Jeremy Vine, but also on BBC Radio Four’s main programmes such as The World at One, PM and Broadcasting House. new food for the prestigious magazine The Grocer for two years.
After joining NationalWorld. com, a national news site run by the publisher of Scotsman and Yorkshire Post, Henry began reporting on the cost-of-living crisis and became editor of the newspaper in early 2023. He’s covered everything from the energy crisis to scams. and inflation. Now you’ll find him writing for MoneyWeek. Outside of work, Henry lives in Edinburgh with his wife and their sighthound Whisper.