Car Insurance Not Paying Full Settlement Amount Following a Claim

[Gary1981]

Hi all,

This is my first post on the forum and I really would appreciate some advice on the matter.

Recently my vehicle was a total loss.

The engineer who inspected the vehicle gave a "market value" for the vehicle of £10,000 although used car prices have increased significantly (I don't feel taken into consideration if I was to replace for a like for like)

Anyway, the insurance company initially was due to pay me £9,450 after deducting their excess (£550)

They have now decided to pay a total settlement of: £7,087.50

They explained this is based on: £10,000 - £550 (excess) = £9,450 - 25% = £7,087.50

Their justification for this was: "when you signed up you failed to disclose the correct vehicle purchase date" "Had this been disclosed to us previously, your annual premium would have increased by 25%. Therefore, now that you have made a claim, this undisclosed fact has been added to your policy and your claim payout has been reduced by the same percentage that it would have increased had it been disclosed"

When the policy was taken out I had said the vehicle was purchased in January when it was actually purchased in March (I don't remember doing this but it must have been a mistake on my behalf)

I feel like my car has been undervalued but I am now also being ripped off by this insurance company for genuinely accidentally entering 2 months before the date it was purchased.

Their calculation also doesn't make sense as surely the premium was increased by 25% so why are they deducting 25% of the claim payout

Please can someone advise what I should do next?

Should I accept their payment as an "interim payment" before they further change their mind?

I will await your responses

(thank you in the meanwhile)

Gary.

[des8]

Could the vehicle have been purchased in January, but not delivered until March?
When did your insurance with this company commence?
Was it when you took delivery or sometime (?years) later?

In any event if your insurance premiums should have been 25% higher (unlikely) all they should be deducting from your indemnity is the missing premiums.

I would be challenging them on this matter, with an eventual complaint to FOS if they don't offer an acceptable payout

Care to name the insurers, and I bet we find they are using a claims management company whose one aim is to keep payouts down and their own recompence higher!

[Oberon2814]

The Consumer Insurance (Disclosure and Representations) Act 2012 allows the insurance company to reduce the payout by the same percentage that the premiums were under paid.

The FOS also uphold this view, if you enter CIDRA as a keyword when searching its decision you can confirm this.

[des8]

Thanks for that reminder Oberon2814 .
I note the reduction is not by the same proportion as it would have been increased but by the application of

I calculate that a higher premium of 25% would produce a 20% reduction in indemnity

I would still be asking for proof that their underwriting policy would increase premiums by 25% on a car purchased some 2 or 3 months earlier than stated.
If it was a new vehicle the purchase price would have been stated anyway, and the difference in value over 2 months is minimal and would be a reduction anyway.

Still suspect this is a decision by an outsourced company.