My insurer paid out less than my financed car's settlement figure, leaving me in debt. Is that legal?

I want to know if it is a legal obligation for my insurance company to put me back in the same financial position as before an accident? My car was on finance with a settlement figure around £11,000. However, the insurer wouldn't pay any more than £8500, leaving me with debt and no car.

Asked on 9 April 2020 by helen smith

Answered by Tim Kelly
They have a legal obligation to put you back into the same financial situation you were in prior to the loss. This is for the item insured, not for your finance. You chose to take the finance and that was your decision to do so. GAP insurance would have covered the difference between the insurer's settlement and the finance owed. The insurer is not liable for that amount, only the market value of the car at the point of loss.
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