Since the cost of living crisis began to bite there has been more scrutiny of big companies and their fairness to consumers who are bearing the brunt of economic decline. Following their investigation into the behaviour of car insurance firms, this week the Financial Conduct Authority (FCA) ordered Direct Line to review the last five years of total-loss claims and reimburse customers who were underpaid.
This order comes after finding evidence of vehicle insurance providers shortchanging their customers – offering figures well below the vehicles’ “fair market value”. Since Direct Line is the second-biggest car insurer, there are potentially thousands of people who were given an unfair settlement when their cars or vans were written off.
As in so many of these cases of industry-wide mis-selling, such as PPI, the process of reassessing all total-loss claims made in the past five years – between 1 September 2017 and 17 August 2022 – and identifying unfair settlements is likely to be lengthy.
It is now up to Direct Line to conduct a review and identify policyholders who received unfair settlements. But there is no reason why consumers who feel that there were shortchanged on their claims shouldn’t push harder for swift redress in the form of reimbursement.
In their report, the FCA noted that in some of these cases, insurance staff would eventually increase their initial offer – but only after a customer complained about it. Direct Line has said that customers do not need to contact them – as they will identify and get in touch with those affected by under-value payouts. However, this issue has shown once again how questioning unfair industry practices is a burden that often falls on consumers.
If you had a vehicle written off in the last five years and think your claim was undervalued now is a great time to complain to your insurer or the Financial Ombudsman. Our free tool can help you raise a complaint to your insurer and keep the pressure on the industry to proactively engage with mistreated consumers.
If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at firstname.lastname@example.org.