FOS complaints about car insurance companies increase

Motorists have grown more frustrated with car insurance companies in the UK, as new figures from the Financial Ombudsman Service indicate that complaint rates have increased over the past year, experts say.

The FOS dealt with 29 per cent more complaints in 2011 from motor car insurance customers than they did the previous year with a total of  7,238 inquiries over the past 12 months.  One of the most often-heard complaints was that discount car insurance providers were not offering enough for vehicles written off due to damage or theft, the FOS report said.

Customers have the expectation that insurers should offer them enough money for their written off vehicle that would enable them to replace it with a vehicle similar to the original one previous to the incident leading it to be written off, the FOS says.  However, some insurers now face accusations of valuing written off vehicles not at their full retail value but at a trade price, or what a car dealer would purchase the vehicle for in order to resell it.

The second-hand car market undergoes periodic fluctuations, said an Association of British Insurers spokesman when asked for comment.  These fluctuations cause changes in valuations, he added, remarking that as members of the public may not keep their ear to the ground in regards to the market, overestimating the replacement value of their own vehicle is quite the common occurrence.

Car owners that are dissatisfied with the valuation offer made by their insurer on their written off vehicle should make their case as to the inadequacy of the proposed amount, industry experts advise.

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