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In need of a valuation

Mataio bought a car back in 2014, and he took the car dealer up on an offer of motor vehicle insurance. The car dealer contacted an insurance adviser, and had the adviser set up a policy for Mataio.

In early 2020, Mataio crashed his car, writing it off entirely. He made a claim with his insurer, and his insurer paid him $23,000.

Mataio was very surprised at this – he had bought his car for $60,000, and he thought that was the amount he would be paid if he needed to make a claim.

He contacted his adviser, who explained how his policy was set up. If Mataio totalled his car during the first 3 years of his policy, he would receive the full $60,000 purchase price (less an excess). However, after the 3 years was up, Mataio would only be insured for the market value of his car. By 2020, 6 years after Mataio bought the car, its market price had dropped from $60,000 to $23,000.

Mataio did a bit more digging, and discovered that after the 3 years was up, he should have contacted his insurer and updated the value of his car. This would have reduced his premium payments. Because Mataio had not updated the car’s value, he had been overpaying for his insurance by around $25 per month.



Mataio felt he’d been let down by his adviser. He thought that the adviser should have prompted him to update his car’s value, and Mataio said it was the adviser’s fault he had been overpaying premiums for the past 3 years.

Mataio was also very disappointed with the amount he had received from his insurance claim. He said he had never received a copy of his policy documents, so he never had the opportunity to look over his cover, see how it worked, and ensure it was suitable for him.

The adviser agreed that he could have provided Mataio a better service if he had prompted him to update his car’s valuation. The adviser offered to pay Mataio the difference between the premiums Mataio had paid over the last 3 years, and the premiums he would have paid if he updated his car’s value in 2017.

As for the missing policy wording, the adviser said that Mataio would have received a copy of his insurance policy wording from his car dealer when he purchased his policy, and he would have been posted another copy shortly after.

Mataio was not sure that the adviser’s settlement offer was fair, so he brought his complaint to FSCL.



After reviewing the adviser’s file, we were satisfied that the adviser’s settlement offer was fair and reasonable.

We thought it was best practice for the adviser to contact Mataio and prompt him to update his car’s value, and it was arguable that the adviser had breached his obligations to Mataio by failing to do so.

But, once the overpayments were discovered, the adviser had made a prompt settlement offer. We double-checked the adviser’s calculations and discovered that the offer would put Mataio in a better position than he would have been in if he had updated his car’s valuation.

We were also satisfied that the adviser had provided Mataio with a copy of his policy wording. The adviser’s detailed records showed that a copy of the policy wording had been posted out to Mataio around a month after he purchased his policy.

We encouraged Mataio to reconsider the adviser’s offer.



Mataio accepted our decision and the premium refund, and agreed to discontinue his complaint.


Insights for consumers

When you receive your annual insurance renewal documents, it is worth taking a look through the policy schedule. This should set out any particularly valuable property which you have insured for a specific value.

Contact your insurance adviser If anything is missing, or if you think some of the property might have dropped in value. You might be overpaying premiums – or worse, something important might not be properly insured.