The FCA recently instructed Direct Line Group to review motor total loss claims over a five year period
Direct Line Group (DLG) has said a review into claims it has been ordered to carry out by the FCA is not expected to have a material financial impact in 2023.
DLG was instructed by the regulator yesterday (28 June 2023) to go back through motor total loss claims settled between 1 September 2017 and 17 August 2022.
The FCA said that the past business review should “identify any policyholders who received unfair settlements and provide them with appropriate redress”.
Today (29 June 2023), DLG said that an “estimate of potential payments the group will make as a result of the review was provided for within the group’s 2022 financial year end claims reserves”.
“The group does not expect the review to have a material financial impact in 2023,” it added.
Warning
This came after the FCA warned insurance firms in December 2022 not to undervalue cars and other insured items when settling insurance claims.
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The regulator said it had seen evidence that some consumers, who had their cars written off after an accident, were being offered a price lower than the vehicle’s fair market value.
In a statement, which did not name any insurers, Sheldon Mills, executive director of consumers and competition at the FCA, said: “When making an insurance claim, people shouldn’t need to question whether they are being offered the right amount for their written off car or other goods that they need to replace.
”Insurance firms should offer settlements at the fair market value.
”This is especially important now as people struggling with the cost of living will be hit in the pocket at precisely the time they can ill afford it.”
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