Industry News
Disputes over total loss valuations fuel 25% increase in complaints about motor insurers
31st July 2007
The Financial Ombudsman Service (FOS), the independent organisation that settles disputes between consumers and financial companies, has reported a 25% rise in motor insurance disputes in the year ending March 2007, a primary cause being a continued rise in the number of disputes concerning settlement valuations given to policyholders whose cars have been written off, reports EurotaxGlass’s.
The statistics place further pressure on motor insurers to introduce more robust and transparent mechanisms for generating valuations, says EurotaxGlass’s, which in March 2007 unveiled Glass’s Value Assessor, a new system designed to provide motor insurers with a consistent and fully auditable process for settling total loss claims.
Pilot tests of GVA show the system can dramatically reduce the costs associated with settling disputed total loss claims (up to £1,000 per claim), and simultaneously helps insurers comply with Financial Services Authority (FSA) regulations governing the ‘fair treatment’ of policyholders. The system provides data both for passenger cars and light commercial vehicles.
In its annual report, for 2006/07, the FOS stated: “It is particularly disappointing that we continue to see so many poorly-handled complaints about write-off values in relation to motor insurance policies … We believe that any insurer in the motor business should be capable of offering a fair price where a vehicle is a total loss…in many cases, a clear explanation from the insurance company about their approach to valuation might have been enough to have prevented the misunderstanding about this escalating into a dispute.”
According to EurotaxGlass’s it is estimated that over half a million vehicles are subject to total loss claims each year in the UK, with the settlement process often hampered by drawn-out negotiations, time consuming administration, customer dissatisfaction and churn, inaccurate vehicle identification, costly referrals to the FOS, and even negative media coverage.
- An all-new version of the Glassmatix collision repair estimating system, developed by EurotaxGlass’s, will be launched in the fourth quarter of this year. A number of repairers have been signed up as pilot sites and will put the new solution through its paces during trials during the summer. It will, promises EurotaxGlass’s, be much easier to use than its predecessor.
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