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An estimated 270,000 motorists are expected to receive £200 million in compensation, after the Financial Conduct Authority (FCA) found some insurers had short-changed customers on stolen or written-off vehicle claims.

The regulator has confirmed that £129 million has been paid to date to nearly 150,000 customers, relating to the historic claims.

The findings have come about after the FCA carried out detailed work with insurers, following an initial review last year.

The review found that, in some cases, automatic deductions to payouts were made for assumed pre-existing damage.

This particularly disadvantaged careful drivers who had looked after their vehicles and made it hard for them to buy like-for-like replacements.

Insurers have now overhauled their claims processe

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