Classic Car Insurance Write-OFf Valuations

classic car insurance write-off UK 

Despite all the advice to agree an insurance value on your classic car at the start of the policy, many owners opt for market value policies. When a classic car is later declared an insurance write-off total loss due to theft or as a result of an accident, the next stage is to negotiate an insurance settlement with the insurer.

As insurers are financial institutions that want to minimise their losses and maximise profit, ‘market value’ insurance write-off valuations are often too low. Settlement offers are usually lower than real-world replacement costs and this can lead to policyholders opening disputes with the Financial Ombudsman Service. I regularly support owners and policyholders in such cases.

Insurers not valuing vehicle insurance write-off cases fairly

A recent survey by the Financial Conduct Authority (FCA) of 12 insurance companies that together made up 70% of the market showed that insurers had been offering policyholders less than their written-off or stolen vehicle is worth and in some cases only raising the offer when a complaint is made.

The review didn’t examine individual cases, but the FCA said it considered that the low average settlement figures indicated that some customers’ claims may have been handled unfairly.

Sheldon Mills, executive director of consumers and competition at the FCA, said: “Having your vehicle written off or stolen can be intensely stressful and we expect firms to offer the right support to help their customers. We expect all motor insurers to take note of our findings and we are engaging directly with those that have issues that need to be addressed.”

Insurers are obliged to handle claims promptly and fairly under FCA rules, said the watchdog. Customers who think their claim may have been undervalued can complain to their insurer and then to the Financial Ombudsman Service if the matter isn’t resolved.

Insurance Write-Off Valuation Reports

Having been through the ombudsman process myself some years ago and received a settlement of less than half the true cost to replace the vehicle, things have not greatly improved in the years since my claim. Perhaps unsurprisingly, I advise taking a independent professional opinion into the case review. In some cases, I specifically advise avoiding the ombudsman and going straight to a solicitor who knows how to handle the full spectrum of loss.

I provide expert valuation reports suitable for both the FCA’s ombudsman and independent legal action in court. When the report has been necessitated by an insufficient settlement offer, the cost of the report is usually refunded by the ombusdsman and any court action can include a claim for costs.

Case Study 1: Audi S4 Avant/Estate insurance write-off and a 40% increase in payout

In November 2022, I as contacted by a London doctor whose 2017 Audi S4 Avant had been damaged in an accident and written off by the insurers. The final settlement offer from his insurance company was £24,000. We agreed that this was insufficient to replace the car. He commissioned one of my expert valuation reports for the market value of his car in pre-accident condition.

My report noted that the car had not been adjusted for several factors, including the myriad options that were fitted to the vehicle. My report subsequently valued the low mileage, high specification Audi S4 at £35,500. He presented the report to the insurer, who increased its valuation to £30,000. As this was insufficient to replace the car, he received an interim payment for the £30,000, while also pursuing a case with the ombudsman.

The ombudsman ruled that the insurance company ‘had not correctly or fairly valued the car’, failing to adjust for the very high specification and low mileage. The Ombudsman’s highest guide price on the vehicle, adjusted for mileage and specification was £32,250. The ombudsman awarded the doctor £33,875 as the average of the highest guide price and my recommendation.

The ombudsman stated: “I have reviewed the specialist valuation report provided by [the doctor] which valued the car at £35,500. Given its reputable source and how comprehensive it is, I’m persuaded that this needs to be taken into account.” While the ombudsman did not award my full valuation recommendation, deciding instead to pay the average of the my report and the next highest valuation, which also made some adjustment for options, my report was instrumental in achieving a much higher settlement figure: over 40% higher than the original final offer.

The ombudsman also stated that “had the insurer provided a fair valuation initially, the doctor would not have had to pay £400 for the specialist report. As such, we recommend that the doctor be reimbursed for the cost of the report, subject to his providing an invoice/receipt.”

This was a significant result for the policyholder and he asked me to share this story to encourage others to follow his example. While it took months to go through this process, the increased payout of almost £10,000 on the original valuation, and a refund for the cost of the report proved that the report was money well spent.

If you are in the same position, then having an independent expert report for use in the Ombudsman’s research and deliberation is well worth while. Contact me to discuss your situation.

What our customers say about our online Classic Car Valuations:

"John, this is great. Thanks very much, I really appreciate your work. I’ll be back in touch with you probably once it’s at the state I wish to keep it in. Best wishes."

Boglarka - Bristol - Series Land Rover Overlander insurance valuation

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Stephen - Isle of Man - Mk1 Mini Cooper S insurance valuation

"Hi John. Many thanks for the valuation of my Morgan Plus 4, an excellent prepared report, great detail and a very professional job.

David in York - 1993 Morgan Plus 4 4-seater insurance valuation

"Dear John, thank you for sending this on. The insurance valuation makes me feel that perhaps in my car buying experience over the years I might just have bought it right. I really do appreciate your input into the whole experience and it has made my wife and I feel very happy about our latest car purchase."

Chris in Dorset - Porsche 993 Cabriolet inspection, purchase support and insurance valuation

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Paul  in Warwickshire - Series 1 E Type OTS insurance valuation

"Hi John, Thank you for your excellent and comprehensive valuation report for my car. A great service provided by yourself and also a very quick response to my initial enquiry. I have forwarded it on to Adrian Flux for them to increase their much lower valuation. I will certainly endorse and recommend your service to other like minded classic enthusiasts going forward."

Roy in Carlisle - MG RV8 insurance valuation

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Andy in Wales - Aston Martin DB9 insurance valuation

"Thank you John so much for your kind attention to my valuation. Wonderful service all round."

Shirley in Brighton - 1963 Wood and Pickett Morris Mini Minor insurance valuation

"Hi John, very many thanks for your report. It makes very interesting reading and it is pleasing to note you consider the car is still in the bracket of a desirable acquisition and as such have increased the replacement cost. I’ve no current intention to sell but it’s always good to know my small collection is not likely to lose huge sums overnight."

Simon in Warrington - bespoke classic Porsche insurance valuation

"Hi John, my insurance company accepted your valuation and amended my policy to suit. The information provided and the way the valuation was composed was in my, and my family’s opinion truly excellent and professional. I would not hesitate to recommend your services to anyone in the future should the need arise."

Simon in Essex - Classic Triumph Insurance Valuation

"Hi John, Thank you for your efforts in providing this valuation! I'm sure my grandad will be thrilled. I shall forward it onto him and advise him with regards notifying his insurance company. Again, can't thank you enough and shan't hesitate to employ your services again in future!"

Oli in Manchester - Riley Special Agreed Insurance Valuation

"Hi John, Thank you so much for your kind words and honest evaluation. I think your valuation and the accompanying justification are more than fair, derived in a very logical and professional way and shown in an easy to read format. If I can provide a reference or a review for your services please let me know as I would be more than happy to do this."

David in Switzerland - HMRC NOVA Valuation - Classic Motorcycle

"John, many thanks for all your help. I am especially grateful for how quickly you have done this valuation. I’m really happy with your valuation and glad that you have appreciated the work that has gone into creating this car. I will not hesitate to recommend your services."

Matt in Birmingham - Agreed Insurance Valuation - Frontline MGB GT

"Hi John, I can now understand why my insurance company recommended you to carry out an assessment of the value of my vehicle. You have done a splendid job, I am very impressed with the detail which you have included and you display an in-depth knowledge of the market. Please accept my grateful thanks for your efforts on my behalf and you can be sure that whenever the opportunity arises I will recommend your services."

Dave in Reading - Classic Ferrari 355 Insurance Valuation

Hi John, Many thanks for getting this back so quickly. Your market commentary is encouraging and I am very happy with the figure. I will send it over to the insurer and ask them to amend the agreed value accordingly.

Nick in Manchester - Agreed Insurance Valuation

"John, this is incredibly helpful, and I can see how much work you have put into it. I am enormously grateful - thank you so much - and Dad will be delighted, I'm sure."

Karen in Ipswich - Agreed Insurance Valuations on unique Jaguar conversions

"John, thank you for the excellent valuation report, most enlightening, particularly the points about the macro economics and how that influences the market demand. We will be in touch when the need arises to revalue our other classics."

John in Bristol - Agreed Insurance Valuation - Morgan 35th Anniversary

"Hi John, Many thanks for your condolences and for the speedy response. The valuation is just what we need as we go through the probate process. The report is very thorough and clear. Thanks again."

Jane in Slough - Probate Valuation - Rover Mini Mayfair

Hi John, I just wanted to give you an update on the car. I listed it for sale on Friday - for £78k to test the waters - and have accepted an offer for £75k, deposit paid, just subject to viewing. I had 3 very serious enquiries within 48hrs, one from Australia. Seems your fantastic insights were spot on - black 911s are very desirable. So just wanted to say thank you.

Simon in London: Porsche 964 market valuation (to sell quickly)

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Classic Car Valuations Specialist is part of Specialist Car Valuations Limited: UK company number 13782283. Values on this site are an opinion: markets can go down as well as up.