4 days ago
Thousands could be due car insurance compensation over ‘unfair' claims as Admiral sets aside £50m
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THOUSANDS of drivers could be owed compensation after being underpaid by their car insurer, as Admiral has set aside £50m to cover claims.
A review of the 12 biggest car insurers by the City watchdog last March found some customers were being offered settlements worth less than their car's value when making a claim on stolen or written-off vehicles.
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Admiral has set aside £50million to compensate customers who may have been affected by the overpayments
Credit: Alamy
Admiral has now become the first insurer to set aside cash to compensate customers who may have been impacted.
In its half-year results on Thursday, the company admitted to failing to respond quickly enough to rising used car prices when settling claims.
Admiral customers who made a claim on a stolen or written-off vehicle between 2019 and 2025 will be contacted by the company if they're owed compensation, the FCA said.
It's expected that other insurance firms will follow suit in announcing their redress plans.
When drivers claim on their car insurance where their vehicle is written off or stolen, they should be offered a payout equivalent to the fair market value of their car.
This is the amount their car should have been worth at the time it was stolen or damaged.
The FCA looked at the 12 biggest car insurers, which it said make up around 70% of the total market.
The watchdog said it had since set clearer expectations for how these sorts of claims should be handled in the future.
An FCA spokesperson said: 'We're pleased that Admiral is acting on our findings to put things right for its customers.
'Customers should wait to be contacted by Admiral and we're working with the firm to make sure that those affected get compensation if they're due it.'
Supreme Court blow for finance compensation
Admiral boss Milena Mondini de Focatiis said just 3% of motor loss claimants had been affected, adding that it was of "paramount importance" for the claims to be handled fairly.
The company said it would begin contacting impacted customers during H2 2025.
Admiral, which has 9.3million customers in the UK, reported strong first-half results this week.
This was led by growth in its motor insurance business, where profits leapt 56 per cent year-on-year.
The FTSE 100-listing said pre-tax profit rose 67% to £516.1 million in the six months to June 30 from £309.8 million the year prior.
It comes after the Supreme Court ruled last month that millions fewer drivers will be entitled to compensation over "hidden commission" payments in a landmark case.
The decision avoided a major headache for chancellor Rachel Reeves, as a major financial redress scheme for victims is no longer needed.
However, millions of drivers are still in line to get up to £950 in compensation for car finance loans.
The City watchdog is set to launch a refund scheme for motorists stung by 'hidden' commission payments, with up to £18billion expected to be paid out as early as next year.
In 2023, Direct Line was forced to pay out £30million in compensation to customers after they were overcharged.
The redress involved home and car policyholders who were charged more than new customers after renewing their policies, which broke rules introduced by the FCA in 2022.
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