How to Challenge an Undervalued Insurance Write-Off Settlement

If your insurer has written off your car and offered a payout that seems too low, you have the right to challenge it. Many policyholders don’t realise that they can dispute their insurer’s valuation for free.

This guide explains how to challenge an undervalued settlement, step by step.

Why Do Insurers Undervalue Write-Offs?

Insurers use trade guides and market data to determine a vehicle’s pre-accident value, but their calculations may not always reflect the true market price. Some common reasons why insurers might undervalue your vehicle include:

• Outdated or incorrect data – Insurers might rely on older valuations that don’t reflect recent price trends.
• Failure to consider vehicle condition or features – If your car had a full-service history, recent upgrades, or was in exceptional condition, its value might be higher than the insurer’s estimate.
• Failure to consider multiple trade guides
• Low initial offers – Some insurers start with a lower figure, expecting policyholders to negotiate.

Can You Challenge the Valuation?

Yes. You can dispute the insurer’s valuation if you feel like you were left out of pocket.

Step 1: Request a Data Subject Access Request (DSAR)

A Data Subject Access Request (DSAR) allows you to see how the insurer arrived at their valuation. This can help you identify any flaws or missing data in their assessment.

How to Request a DSAR:

• Send a written request to your insurer stating that you wish to receive all valuation data under a Data Subject Access Request (DSAR).
• You can specify that you want:
  • The trade guides used
  • The specific values assigned
  • Any supporting data or reports (e.g engineering evidence)
• Insurers have one month to respond under UK data protection law.

Step 2: Gather Independent Valuation Evidence

To challenge the insurer’s offer effectively, you need independent valuations to support your case.

Where to Get Valuations:

• AutoTrader – Check listings for similar vehicles.
• Parkers Guide – Provides trade valuations.
• Glass’s Guide – Used by many insurers and trade professionals.

Some of these services require a fee, but the reports can be critical in proving your vehicle’s true value.

Step 3: Write to Your Insurer

Once you have independent valuations, you need to send a formal challenge letter to your insurer. Your letter should include:

• Your claim reference number.
• A clear statement that you believe the valuation is too low.
• The independent valuations you have obtained.
• Reference to FCA’s fair value principle, which requires insurers to offer reasonable settlements.

Step 4: Insurer’s Response

Your insurer may:

• Accept your evidence and increase the payout.
• Negotiate and offer a slightly higher amount.
• Reject the challenge and stand by their original offer.

If the insurer’s revised offer is still too low, you can escalate the complaint further.

Step 5: Escalate to the Financial Ombudsman Service (FOS)

If the insurer refuses to pay a fair amount, you can take your complaint to the Financial Ombudsman Service (FOS). This is a free service that resolves disputes between consumers and financial firms.

How to Complain to the FOS:

• Visit the Financial Ombudsman Service website and submit your complaint online.
• Include copies of your DSAR response, independent valuations, and all correspondence with the insurer.
• The FOS will review whether the insurer’s offer is fair and reasonable.

The FOS process can take several months, but if they decide in your favor, your insurer will be required to pay the correct amount.

What Does the FCA Say About Fair Value?

The Financial Conduct Authority (FCA) requires insurers to offer fair and transparent settlements. In December 2022, the FCA warned that some insurers were undervaluing claims and reminded them of their obligations under fair value rules.

• Insurers must justify how they calculate valuations.
• Consumers should not be pressured to accept a low offer.
• If a settlement is unfair, the FOS can step in.

How Allegiant Can Help (If You Prefer Professional Assistance)

If you’d rather have experts handle the process, Allegiant offers a no win, no fee service to challenge undervalued settlements.

Allegiant’s Process:

• Requests all valuation data from the insurer.
• Sources independent trade guide valuations.
• Drafts a strong challenge letter based on FOS decisions.
• Handles negotiations with the insurer.
• Escalates the case to the FOS if necessary.

You only pay a fee if we secure a higher settlement for you. However, you can still go through the entire process yourself for free if you prefer.

Conclusion: Take Action If You’ve Been Undervalued

• If you believe your write-off settlement is too low, you have the right to challenge it.
• Request a DSAR from your insurer to understand how they calculated the valuation.
• Gather independent valuation reports to support your case.
• Write a clear challenge letter referencing FCA fair value rules.
• If necessary, escalate your case to the Financial Ombudsman Service (FOS).

For those who want expert help, Allegiant can handle the process on a no-win, no-fee basis.

Useful Resources:

• FCA Fair Value Guidance
• Financial Ombudsman Service

By taking these steps, you can ensure you receive the correct settlement for your written-off vehicle.