Mulsanne Insurance Company Limited · DRN-6056598

The complaint Mr R complains about the settlement Mulsanne Insurance Company Limited (Mulsanne) made to him for a claim he made on his motor insurance policy after his car was declared a total loss. What happened Mr R holds a motor insurance policy with Mulsanne. When his car was damaged in an accident, he made a claim. Mulsanne accepted the claim and agreed to settle it, by offering Mr R the market value of his car at the time of the loss. Mulsanne thought the market value of Mr R’s car was £5,450 (before the outstanding premiums were deducted). It said it used the available valuation guides to reach that figure. Mr R didn’t think this was enough and complained to Mulsanne. Mulsanne didn’t agree, it said it used three valuation guides which produced valuations of £5,147, £5,242 and £5,960. It calculated an average using the three guides to achieve its valuation. Our investigator recommended the complaint be upheld. They didn’t think Mulsanne had sufficiently evidenced why it’s offer, which was lower than the highest valuation guide figure was a fair value. They recommended it pay Mr R the highest valuation. Mr R agreed to this assessment. Mulsanne didn’t agree. It asked for an ombudsman’s decision. It said the settlement amount was the average of the three industry guides and thought it was fair. Because it was more than its engineer had valued the car, having taken into account the pre-existing damage. So the case 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 it. I’ll explain why. Mr R’s policy with Mulsanne says the most it will pay for any claim is the market value of the vehicle. It defines that as “the cost of replacing your vehicle with a vehicle of the same make, model, specification, age, mileage and condition as your vehicle was immediately before the loss or damage you are claiming for”. We’ve an established approach on what we look at when determining whether an insurer has offered a fair market value.

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Our approach, to avoid potential detriment, is that where an insurer considers the car’s market value to be less than the highest value returned from the guides we use, it needs to evidence that valuation is fair by providing supporting evidence. I’ve thought carefully about Mulsanne’s comments and considered the engineer’s report it has provided. Mulsanne has provided an engineer’s report that includes photographs of the damage on the rear of the car. From the photographs provided, I cannot see any pre-existing damage Mulsanne refers to, although I acknowledge the engineer has referred to the car as ‘fair condition’. I’m conscious that Mr R’s car was 11 years old and had covered over 165,000 miles at the time of the loss. And looking at the photographs and Mulsanne’s comments, I’m not persuaded it has done enough to show the damage Mulsanne has referred to is more than you’d expect for a car of its age and mileage. It follows that I’m not persuaded Mulsanne’s valuation of £5,450 is fair and reasonable. Given there isn’t any other relevant evidence to persuade me that a valuation in line with the highest guide is inappropriate and to avoid any detriment to Mr R, I consider a fair market value would be £5,960 – the highest guide amount. Mulsanne has already paid Mr R’s claim based on a market value of £5,450 (less the outstanding premiums). The highest guide amount was £5,960. That’s a difference of £510. I think Mulsanne should pay this amount to Mr R. Because an interim offer was made, as we’d expect it to have been. Our approach is that where there is a difference between the interim settlement and final settlement, then the insurer should add interest to this amount. And so I think Mulsanne should add interest at a rate of 8% simple on the difference from the date it paid Mr R’s claim to the date it makes this payment to him. My final decision For the reasons set out above, I uphold this complaint and require Mulsanne Insurance Company Limited to: • Pay Mr R £510. This represents the difference between the previous market value of £5,450 and the highest guide being £5,960. • Interest* should be added to this payment at a rate of 8% per annum. Interest should be calculated from the date it paid Mr R’s claim, to the date it makes this payment to him. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr R to accept or reject my decision before 23 April 2026. *If Mulsanne Insurance Company Limited considers that it’s required by HM Revenue & Customs to deduct income tax from that interest, it should tell Mr R how much it’s taken off. It should also give Mr R a tax deduction certificate if he asks for one so he can reclaim the tax from HM Revenue & Customs if appropriate. Lorraine Ball Ombudsman

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