Vehicle insurance - Payout too low

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Based on resolver’s experience to date, a common dispute that can arise will be when the insurer's proposed pay out for your loss is too low. Car insurance companies must offer you a proper payout for the value of your car or the cost of repairs. Don’t accept the first offer given by the insurer over the phone - car insurance companies must offer you a proper payout for the value of your vehicle or the cost of repairs. This means you must be offered a sum that will allow you to buy a like-for-like car in a similar condition in your local area or to get the vehicle repaired at a reputable garage in your area. The insurer should only deduct the excess you agreed to when taking the policy.

In order to value the cost of repairs you should obtain a number of quotes from garages in your area and take the lowest one from a garage which you are happy to send your car to. In some cases your car may only be suitable for repair at authorised dealerships or by a garage approved by your insurer. If this is the case you will be justified in not taking the lowest quote available to you. Consult your user manual and insurer to see if either of these scenarios arises.

Gather evidence in the event that the insurers make a low offer - look in local forecourts, local newspapers and car selling websites to get an idea of a price a like-for-like car will cost - then talk to your insurer about its disputes process. You can get an independent assessor to have a look at your car, but this can be risky; you employ an assessor to value your car for a small non-refundable fee, then assessor's decision is final - if they decide the car is worth less than the insurer originally offered you, you could end up even more out of pocket.

As a last resort you can contact the Financial Ombudsman Service, which will act as a mediator in your case. resolver recommends that you submit your concern in writing, and resolver can assist you in submitting, recording and reminding you when and who to escalate to.

Resolver can help you resolve this issue quickly, free of charge and without the hassle. We can also help you with the next step of writing your complaint. Click on the link below to create your email.
You should know
  • Make sure you declare any changes in personal circumstances that may affect your policy
  • The quoted price will be based on a less detailed set of data about you, so the actual price may go up once the company has received more detailed information about your circumstances and desired level of covers
  • Most insurance policies will renew automatically, but your insurer should inform you of this in good time beforehand
  • After you take out a policy, or it is renewed, you’ll have a cooling-off period during which you have the right to cancel. This is typically 14 days
  • Always provide as much evidence as possible for any claims you make
  • If you cannot resolve your issue you can take your case to the Financial Services Ombudsman after eight weeks
  • If you’re making a complaint about making an insurance claim rather than a mis-sold policy, check your documents to see who the “underwriter” is. You’ll need to make a complaint to that organisation.


All insurance policies are there to help you resolve issues and to protect against emergencies. It is important that you read your terms and conditions prior to signing any agreement.

Declare changes

It is essential that you declare any changes in your circumstances that may affect your policy as otherwise this can void your policy. If you are in any doubt, contact the insurer immediately.

Difference between quote price and actual

Sometimes the price quoted by an insurer is different from the price paid after you have signed the agreement. This may be because the price that they quoted was based on assumptions, or perhaps the onus was on you to provide some additional information.

If this is not the case, go back to the insurer and challenge the difference. If you’re within the first 14 days, you can cancel without any issues. After this, you will need to prove the terms that you signed to are unfair.


Any exclusions that the insurer will not pay out on should have been clearly explained to you when you signed the agreement. This could be within the general terms of the agreement.


The excess is a way of reducing the cost of your policy. This means that you will have to pay a specified amount towards a claim, and the insurer will then pay the rest. This should have been made within your insurance policy as well as when you signed/agreed to the insurance policy.

Informing your insurer when claiming

You should get hold of your insurer prior to spending any monies that you want to claim on your insurance policy. If it’s an emergency and this is not possible then you can agree to have works done, but this is a risk and as soon as you can you should contact the insurer and explain.

Reasonable terms and conditions

All the terms and conditions must be reasonable within the policy. All financial products follow the principles of being fair and reasonable. If you think that the terms are not fair and reasonable then you have the right to challenge these – you should do so by complaining via resolver.

Cooling off period

Insurance contracts will have a cooling-off period, typically 14 days. This happens after you sign/agree to an agreement or after you automatically renew your agreement.

Automatic renewals

Most insurance policies will auto-renew, to ensure that you are protected. If this happens, then the firm should have contacted your prior to your renewal, typically three weeks before. Even if you have auto-renewed, you still have 14 days in which to cancel.

Paying up front or in monthly instalments

It is usually cheaper to pay in advance. If you pay monthly, the insurance firm may charge interest on the repayments. They are entitled to do this, but you should expect the extra costs to be reasonable.

Making a claim

When making a claim on your insurance policy, ensure you have as much supporting evidence as possible. If applicable, take photos or videos with your phone and store these as evidence, as well as any emails or written documentation. Use resolver to store and manage your claim, so that if you cannot resolve your issue then you have a complete case file to send to the Financial Ombudsman Service.

Claim rejected/too low

If your claim is rejected or the proposed pay-out is too low, then explain why you feel this is the case. If, for example, it is below the market value, then you need to find out if your policy has a new-for-old clause where they will replace any item with a new one.

If, however, you have a replacement policy, then you can only expect a replacement or money based on the age of the product; this means the pay-out could be below what you bought it for or what you feel it is worth.

If you are dissatisfied and cannot resolve the issue, then raise our case with the Financial Ombudsman Service. If you need to take the payment, then accept the payment but clearly explain this is accepted under duress and that you intend to challenge the decision.

If the firm goes out of business

If the firm goes bust, then you should contact the Financial Services Compensation Scheme (FSCS) who are able to assist in resolving any money that you may be owed.

If the issue is not resolved

If the issue is not resolved then you have the right to escalate your case to the Financial Ombudsman Service. The Financial Ombudsman Service will only accept your case eight weeks after you’ve raised the issue as a complaint with the insurance provider. Resolver will help ensure you have a fully packaged complaint to send to the ombudsman. The ombudsman will look at your complaint and determine if you have been treated fairly and also if their terms and conditions are fair and reasonable.

Any decision by the Ombudsman is binding on the company, but only binding on you if you accept the decision.

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