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ombudsman news

issue 88

August/September 2010

ombudsman news "Q&A" page

featuring questions that businesses and advice workers have raised recently with the ombudsman's technical advice desk - our free, expert service for professional complaints-handlers.

What's your approach to assessing the market value of a vehicle that's been written-off, as a result of theft or damage-

A. In this situation, most motor policies require the insurer to compensate the policyholder for the vehicle's market value, immediately before it was stolen or damaged. Disputes are often referred to us where the policyholder thinks their vehicle was worth more than the insurer has offered.

We normally consider the 'market value' to be the retail price which the policyholder would have had to pay, if buying a comparable vehicle from a reputable dealer immediately before the date of the damage or theft.

This may be a lower price than the one at which the vehicle is advertised - as the dealer may have built in a margin for negotiation. It is also likely to be higher than the price payable in a private sale or at an auction - and higher than the 'trade value' - which is the price a dealer would pay before adding a mark-up.

Assessing the value of a used vehicle is not an exact science - although we strive to be as consistent as reasonably possible. We take into account all relevant evidence, paying most attention to valuations given in motor-trade guides, such as Parker, Glass and CAP. These are based on extensive nationwide research.

Evidence from an independent engineer can be helpful, particularly where the vehicle is not a standard one (for example where it has been heavily modified). Evidence from an insurer's engineer may also be helpful - but we will need to assess the independence of the report.

To back up their view that their insurer has underestimated the value of a vehicle, consumers sometimes send us copies of advertisements for similar vehicles. We do not generally find such advertisements particularly persuasive. A vehicle may often be sold for less than the advertised price. And small differences in mileage, year of registration, model type etc can significantly affect the value.

There is more information about our approach to the motor insurance disputes we see most often in our online technical resource.

Can you tell me more about the training events you arrange for consumer advisers-

A. We regularly run special one-day training events around the UK, aimed at advice workers who deal with front-line enquiries from consumers facing problems with financial services. These events, which are free of charge, provide the opportunity to learn more about the role of the ombudsman service, how we work, and our approach to different types of financial disputes.

We are very keen to welcome the widest range of people from consumer and voluntary groups to our events. Those attending typically include staff from Citizens Advice Bureaux, trading standards, debt support agencies, local council departments, charities and consumer support agencies.

So far this year we have run more than a dozen of these events in different areas of the UK. Information about events coming up over the next few months, together with details of how to book, can be found in the 'news and events' section of our website.

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For printed copies of this or any of our publications, phone 020 7964 0092 or email publications.

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.