British insurance companies are paying £200 million ($270 million) to compensate motorists whose claims were underpaid, the Financial Conduct Authority said on Friday.
Insurers including Direct Line Insurance Group Plc and Admiral Group Plc are getting in touch with about 270,000 affected customers, according to the watchdog. About £129 million has already been paid out.
The regulator started a review of practices around car insurance claims last year, finding that some providers were making automatic deductions for assumed pre-existing damage to vehicles. This particularly disadvantaged careful drivers, according to the FCA.
“We’ll step in when consumers aren’t getting fair value — and we are pleased to see that the practices which led to some unfair payouts have already changed,” Sarah Pritchard, deputy chief executive officer of the FCA, said in a statement.
These measures are separate from a probe into the motor finance industry that reached the UK’s Supreme Court earlier this year. The FCA is working on the redress program for those customers who were charged secret commission on car loans.
Photograph: Traffic on the M25 motorway in UK; photo credit: Justin Tallis/AFP/Getty Images
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