Customers to receive £200m in motor insurance compensation

After the FCA found that some insurers were short-changing customers on stolen or written off vehicle claims, motor insurers have changed their settlement and compensation practices. The shift means that around 270,000 motorists are expected to receive £200m in compensation for prior unpaid claims.

In 2024, the FCA conducted a multi-firm review which found that some insurers were making automatic deductions to payouts that were made for assumed pre-existing damage, which disadvantaged careful drivers who had looked after their vehicles and made it hard for them to buy like-for-like replacements.