The Financial Conduct Authority has reported that motor insurers have revised their settlement and compensation practices after the regulator found some firms underpaid customers on stolen or written-off vehicle claims. The FCA estimates around 270,000 motorists will receive a total of GBP 200m in compensation for historic underpayments, with GBP 129m paid so far to almost 150,000 customers. Detailed FCA work with insurers following an initial review found that some insurers made automatic deductions to payouts for assumed pre-existing damage, which particularly disadvantaged customers who had looked after their vehicles and made like-for-like replacement harder. Claims processes have been overhauled in line with the FCA’s Consumer Duty, and affected customers will be contacted by their insurer; customers dissatisfied with claims handling can complain to their insurer and then to the Financial Ombudsman Service without using a claims management company. The FCA linked the changes to its wider vehicle valuation work, including a December 2022 warning to insurers and a March 2024 multi-firm review that covered around 90% of the market.
Financial Conduct Authority2025-09-18
UK Financial Conduct Authority secures changes to motor write-off and theft claim settlements and GBP 200m redress
The Financial Conduct Authority (FCA) announced motor insurers revised settlement practices after underpaying customers on stolen or written-off vehicle claims. About 270,000 motorists are expected to receive GBP 200 million in compensation, with GBP 129 million already paid to nearly 150,000 customers. These changes follow the FCA's Consumer Duty and are part of broader vehicle valuation efforts, including a December 2022 warning and a March 2024 review covering 90% of the market.