Admiral Insurance (Gibraltar) Limited · DRN-6064197

The complaint Mr M complained about the settlement Admiral Insurance (Gibraltar) Limited (“Admiral”) offered him following the total loss of his car, under his motor insurance policy. What happened Mr M said his car caught fire. He made a claim to Admiral, which it accepted. It then offered him a settlement payment for the total loss of his car. Mr M accepted the offer, and his car was collected from his home. He said he then received a lower payment than was agreed. He contacted Admiral and was told the wrong mileage had been used when calculating the value of his car. When this was corrected it reduced the valuation. Mr M said he would not have allowed Admiral to take his car away had he known the correct settlement payment. The business would not increase this amount, so he complained. In its final complaint response Admiral said it had settled Mr M’s claim based on the market value of his car as required by its policy terms. It acknowledged that the amount it had initially advised was reduced, and this wasn’t communicated. It apologised and paid £50 compensation. Mr M didn’t think Admiral had treated him fairly and he referred the matter to our service. Our investigator upheld his complaint in part. He thought the settlement offer was fair. But the poor handling of the claim had caused confusion and concern for Mr M. He said the business should pay a total of £150 compensation to put this right. Admiral accepted our investigator’s findings. Mr M didn’t. He said he felt strongly that Admiral had handled his claim poorly and asked for an ombudsman to consider his complaint. It has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so I’m upholding Mr M’s complaint in part. I won’t be adding to the remedy our investigator set out. I’m sorry to disappoint Mr M but I’ll explain why I think my decision is fair. Mr M’s policy pays the market value in the event of a total loss due to fire damage. Market value is defined in Admiral’s policy terms as: “The cost of replacing your vehicle; with one of a similar make, model, year, mileage and condition based on market prices immediately before the loss happened. Use of the term ‘market’ refers to where your vehicle was purchased. This value is based on research from industry recognised motor trade guides.”

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We don’t provide valuations for vehicles but rather we look to see whether the insurer’s offer is reasonable. In assessing whether a reasonable offer has been made, we obtain valuations from the motor trade guides. These guides are used for valuing second-hand vehicles. We find these guides to be persuasive because their valuations are based on nationwide research and likely sales figures. The guides also consider regional variations. We also take all other available evidence into account, for example, engineer’s reports. I can see Admiral obtained valuations from three of the trade guides we use. I’ve checked that it used the correct make, model and age for Mr M’s car. Also, that it used the correct mileage and date for his loss, which it did. The valuations Admiral obtained were £2,593, £3,475 and £3,670. It took the average of the top two values, which came to £3,572.50. After deducting Mr M’s policy excess of £150, the settlement came to £3,422.50 Our investigator obtained valuations from these same three guides plus one more that we use. Again, I’ve checked that he used the correct details when obtaining this information, which he did. The valuations were for £2,646, £2,762, £3,450, and £3,670. Admiral’s policy is intended to indemnify Mr M against his loss. This means to put him back in the position he was in immediately prior to the fire. To do this the business needs to show that the settlement is enough to allow Mr M to buy a replacement vehicle. Admiral’s settlement payment was close to the highest of the trade guide valuations. So, I think it has offered him a settlement to allow this and that this aligns with the cover he has in place. So, although I’m sorry Mr M is disappointed, I can’t fairly ask Admiral to pay him more. I’ve thought about the incorrect valuation that Admiral initially confirmed to Mr M. There’s no dispute that this was the result of the business using the wrong mileage in its valuations. I acknowledge Admiral’s reference to the caveat detailed in its settlement letter. Mr M was informed that the amount is subject to completion of necessary checks. Also, that Admiral reserved the right to amend this amount should further information come to light. I don’t think it was unreasonable that Admiral amended Mr M’s settlement to reflect the true value of his car. But the records show it was told the correct mileage when he first reported his loss. So, it wasn’t the case that new information came to light. This was just a mistake on its claim handler’s part. This doesn’t alter my view that the business was able to amend the settlement payment. But it does demonstrate poor claim handling. Mr M wasn’t contacted to let him know that the settlement he would receive had been reduced from £4,310 to £3,572.50. This caused confusion and some distress as he’d already accepted a settlement payment and was expecting a higher amount. To acknowledge the impact this had on Mr M, I agree with our investigator that £150 compensation, in total, is fair. I’ve considered Mr M’s comments that he would not have allowed Admiral to recover his car, had he known it would reduce his settlement payment. But as discussed, he was paid a fair settlement as provided for under his policy terms. The claim records refer to the fire damage as not being repairable. I’ve not seen any evidence to suggest otherwise. So, although I understand why Mr M was disappointed. I don’t think another outcome was likely other than to accept a settlement payment for the total loss of his car. In summary I don’t think Admiral treated Mr M unfairly when it settled his claim for the total loss of his car for the amount it did. But it didn’t treat him fairly because of the mistake it made with the valuation and its failure to communicate this effectively. So, Admiral should pay Mr M £150 in total to put this right.

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My final decision My final decision is that I uphold this complaint in part. Admiral Insurance (Gibraltar) Limited should: • pay Mr M £150 compensation, in total, for the impact of its valuation mistake and poor communication had on him. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 21 April 2026. Mike Waldron Ombudsman

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