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What Happens if My Motor Insurer Undervalues My Car in a Write-Off Claim?
If your vehicle is written off and you believe your motor insurer has offered less than the true market value, you should challenge the settlement before accepting it.
Most GAP Insurance policies base their payout on the final settlement figure agreed by your motor insurer, but will expect the motor insurer to pay the fair market value.
Even if you have GAP Insurance, you do not have to accept an unfair valuation.
Can I Dispute a Low Insurance Valuation?
Yes.
If you think your insurer has undervalued your car, you can ask them to review the offer and provide evidence showing why you believe the vehicle is worth more.
Useful evidence can include:
- Advertisements for similar vehicles
- Dealer retail prices
- Optional extras fitted to your vehicle
- Full service history
- Low mileage
- Independent vehicle valuations
Many insurers will reconsider a settlement if strong evidence is provided.
You will also have the option of lodging a formal complaint and, if still not satisfied, taking your complaint further to the Financial Ombudsman Service.
You may also want to read:
Will GAP Insurance Still Pay Out?
Usually, yes.
Once your motor insurer settlement has been agreed, the GAP Insurance claim can normally continue in line with the policy terms and conditions.
In some cases, the GAP claims team may also approach the motor insurer directly if they believe the settlement for the vehicle involved is lower than expected.
This process does not normally delay the GAP claim.
It is often key that you do not accept your motor insurer's settlement before starting your GAP claim. This allows the GAP Insurance team to assess the motor insurers settlement is fair before the motor insurer can close the claim.
Why Does the Motor Insurance Settlement Matter?
GAP Insurance is designed to cover the financial shortfall after your motor insurer has settled the main claim.
For example:
- Your vehicle originally cost £35,000
- Your motor insurer pays £24,000 after depreciation
- Your GAP Insurance may cover the difference back to the original invoice price or replacement cost, depending on the policy type
If the motor insurer increases its settlement to £26,000 following a dispute, the GAP payout may be reduced because the overall shortfall is smaller.
This is normal, as insurers are expected to pay their fair share of the claim based on the premium charged for the risk.
Related guides:
- Return to Invoice vs Vehicle Replacement GAP Insurance
- What happens if my motor insurance does not cover my finance?
- Does GAP Insurance cover negative equity?
The Bottom Line
If you believe your motor insurer has undervalued your written-off car, you do not have to accept the first offer immediately.
Challenge the valuation with evidence if needed, and only agree to a final settlement once you are satisfied it reflects a fair market value.
Any GAP Insurance claim can then be calculated using the agreed settlement figure under the terms of your policy.