Admiral, one of the UK's largest motor insurers, has allocated £50m to compensate customers who received inadequate settlements for stolen or written-off vehicles between 2019 and 2025.
The provision follows a Financial Conduct Authority (FCA) investigation into motor insurance settlement practices across the sector.
Regulatory investigation and response
The FCA has been investigating 12 major insurers, representing 70% of the UK motor insurance market, for insufficient settlement payments.
Admiral has acknowledged that internal processes failed to respond quickly enough to rising used-car prices. Approximately 3% of Admiral's motor total loss claims over the examined period were affected. Admiral expects to contact affected customers before the end of the year, although the exact identification process remains unspecified.
Industry-wide implications
Admiral's disclosure is expected to prompt similar responses from competitors under FCA scrutiny. The regulator has identified common practices, including unfair wear-and-tear deductions, initial low offers, and settlements below true replacement costs.
The FCA advises policyholders to wait for direct contact from Admiral regarding potential compensation rather than proactively contacting the insurer.
What does this mean for insurers?
Admiral's allocation could signal broader industry-wide implications, as the FCA is investigating 12 major insurers for similar practices, including unfair deductions and below-cost settlements.
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