Aviva Insurance Limited · DRN-5995196

The complaint F has complained about the amount Aviva Insurance Limited has paid in settlement of its claim under a motor trade insurance policy. F is represented by Mr B. What happened F claimed for damage to its premises, property and a customer’s vehicle following a fire at the premises insured under its policy. The customer’s vehicle that was damaged was a Massey Harris 722 combine harvester, which I’ll refer to as MH, which was manufactured in 1948 and had been fully restored by F for the customer. The cutting implement that attached to the front was detached at the time of the fire and wasn’t damaged. Aviva appointed an agent, who I’ll refer to as B, to value the MH. They said its value at the time of loss was £6,500. Aviva then added what it had cost F to restore it in terms of labour and parts to this figure and offered £23,148.23 in settlement of F’s claim for MH. F wasn’t happy with this offer, as it thought it would cost a great deal more than this to replace MH. Mr B complained to Aviva on behalf of F, but it wouldn’t alter its position. So, Mr B asked us to consider F’s complaint. One of our investigators considered F’s complaint. She said that Aviva was wrong to deduct 10% from the labour charge it had allowed for the restoration work on the MH by F and that it should increase its settlement figure for the claim to reflect this. Aviva agreed to do this, but Mr B said F wasn’t happy with this outcome. As F wasn’t happy, the complaint was passed to me for a decision. I spoke with Mr B and asked him to provide some more evidence, which he provided. I issued a provisional decision on 17 November 2025 in which I set out what I’d provisionally decided and why as follows: I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. F’s claim is under the cover for customer vehicles provided by the policy, with a sum insured of £125,957. The claims settlement terms in the policy state that if property insured under it (this would include a customer’s vehicle) is lost or destroyed Aviva will pay for its replacement. This means Aviva should pay what it would cost F to replace the MH in settlement of its claim. Aviva clearly believes it has offered enough to replace the MH in settlement, but I don’t think it has. Aviva’s assessment of the replacement cost is based on a report provided by B. But I do not find this report persuasive. B is an agricultural business consultant, but I have not seen any evidence it has specialist knowledge of vehicles as rare as the MH. As I understand it, the MH was one of only four remaining models in the world at the time it was damaged. This is because only around 150 were ever manufactured and most of these have long since been

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scrapped. B has pointed to an auction in September 2019 in which a restored combine harvester, which was the same model as the MH was up for sale with a reserve of £6,000, but didn’t sell. However, as Mr B has pointed out, this auction was meant to be online as well as in person, but the online part didn’t happen. So, the number and make up of those bidding was very limited indeed. Plus, B suggested that the MH had been partially restored, when – according to Mr B - it had been fully restored. And it is not clear why B thought otherwise. B has also provided numerous examples of other Massey Harris combine harvesters that sold for various amounts in support of its valuation. But it doesn’t appear to have appreciated that these are all models manufactured in the USA, which according to Mr B, are far less sought after than the limited number of models built in the UK. I have no reason to doubt this. Also, B has suggested the MH belonged to F, when it is quite clear from Aviva’s loss adjuster’s report it belongs to F’s customer. Mr B is a specialist collector and has an extensive knowledge of this type of vehicle and what it takes to restore them. And he has a large collection of other vintage combine harvesters. So, I find his comments and the evidence he has provided much more persuasive than the comments and evidence provided by B. Mr B provided an email from the owner of another combine harvester of exactly the same model as the MH in May 2023, who I’ll refer to as Mr S, in which he said that it wasn’t restored to the very high standard MH had been restored to. And that he would not accept an offer of less than £40,000 for it. And – at my request – Mr B has just provided an email from Mr S stating that, while he is currently unwilling to sell his Massey Harris, if he did so he would sell it for £40,000. He’s also explained that it is not fully restored like the MH and that to get it to the same standard of restoration would cost around £10,000. Mr S owns the Massey Harris he has privately, so if he did sell it he would not charge VAT. According to Mr B, there are only two other combine harvesters the same as the MH that exist. One in a museum in Suffolk that is not for sale. And one belonging to a private collector in Scotland, who he can’t make contact with. So, as I see it, the only way F could actually replace the MH would be to pay at least £40,000 to buy one of the three other Massey Harris combine harvesters which are exactly the same make and model as the MH. And, while this isn’t actually possible at the moment, it is clear that this means the replacement cost of the MH is at least £40,000. However, Mr S’s Massey Harris would not be a like for like replacement, as it is not based on the same high standard of restoration as the MH. And it means, even if F could buy Mr S’s Massey Harris, to actually provide a like for like replacement to its customer, F would have to carry out the work required to achieve to restore it to the same standard as the MH. Mr B agrees with Mr S of £10,000 to do this. And, while it is only an estimate, I think it is fair to say that in view of Mr B’s level of knowledge and expertise it is likely to be accurate. I have also taken into account that Aviva is willing to pay F nearly £18,000 for the restoration work it carried out on the MH, which seems to support the £10,000 suggested by Mr B to restore Mr S’s Massey Harris. So, I think this amount needs to be added to the £40,000 to reach the full cost of replacing the MH. Therefore, I consider the fair and reasonable outcome to F’s complaint is for Aviva to pay £50,000 in settlement of F’s claim for the MH. It did offer F an interim settlement of £23,148.32 in July 2024 via F’s insurance broker, which F didn’t actually respond to. So, I don’t think Aviva needs to pay interest on this amount. But I do think Aviva should pay interest on the additional amount due above this at 8% per annum simple from one month after it made its claim to the date of payment to compensate F for being without these funds.

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I have allowed one month for the fact that Aviva needed to investigate and assess the claim and arrive at the settlement amount, which I consider to be reasonable in the circumstances. I have noted that Mr B has raised concerns about how long it has taken for Aviva to deal with the claim and the distress and inconvenience this has caused him. But this complaint is by F, which means I can only compensate F for any inconvenience it has experienced. And, as a company, F can’t experience distress. And while it may have been frustrating for F having to wait so long to get the right settlement amount, I can’t really see how this delay has caused it any inconvenience, in the sense that all it meant is it couldn’t get on with purchasing a replacement for the MH or pay its customer the replacement cost. This would have inconvenienced its customer, but not F, as I see it. So I am not going to award any compensation for inconvenience. My provisional decision For the reasons set out above, I’ve provisionally decided the fair and reasonable outcome to F’s complaint is for Aviva Insurance Company Limited to pay £50,000 in settlement of its claim for the MH. I have also provisionally decided that Aviva should pay interest on the amount due above its interim offer of £23,148.32 at 8% per annum simple from one month after F made its claim to the date of payment. I gave both parties until 1 December 2025 to provide further comments and evidence in response to my provisional decision. Mr B has responded on behalf of F. He’s said that overall F is willing to accept my provisional decision, but he has stressed that Aviva’s offer of £23,148.32 was never accepted. He believes this means that interest should be paid on the whole amount due to F. Aviva has said it doesn’t agree with my provisional decision and it has made the following further comments: It has said the policy cover for customer vehicles is on an indemnity basis of settlement and it has quoted the policy definition of this basis of settlement, which is as follows: The basis upon which We will calculate the amount We will pay in respect of any claim will be 1) the cost of replacement or repair of the property lost, destroyed or damaged, to a condition as good as, but not better or more extensive than, its condition immediately prior to the Damage, or at Our option 2) the reduction in value of the Property Insured, unless the Basis of Claim Settlement – Reinstatement Clause or any other alternate Basis of Claim Settlement is stated to apply. Aviva has said it remains its view that the immediate pre-loss value of MH was less than the £40,000 suggested in Mr S’s email. It’s added that if £10,000 is deemed to be the current estimate of the cost of bringing Mr S’s Massey Harris up to the same standard as MH, then it would have cost less than this at the date of the loss when inflation is factored in. It's pointed to the expert who provided the report and estimate of the value of MH as suitable and referred to his professional credentials as detailed in his report. It’s provided two newspaper articles. And it’s said the first one from 2012 shows that a

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Massey Harris 722 was to be auctioned by their expert. And the other article from 2022 shows that Mr S purchased the same combine harvester in 2019 having been part of the team that restored it to working order. Aviva believes this demonstrates that its expert is suitably qualified, as he sold the exact same combine harvester that Mr B is now seeking to rely on to justify his valuation. Aviva has also pointed out that the basis of its valuation of MH was in accordance with the RICS Valuation – Global Standards 2017. It has said its expert adopted an industry standard approach to his valuation. And it’s provided the definition of market value that its expert used. Part of this refers to it being the estimated amount for which an asset should exchange between a willing buyer and a willing seller. Aviva has said Mr S does own a combine harvester of the exact same model as MH, but is not a willing seller and that he has set a price with no factual basis for this amount. And Aviva has said the amount he has suggested could have been influenced by the fact he knows MH has been destroyed. And it’s pointed out F (or Mr B on F’s behalf) was not a willing buyer, as he was just approaching Mr S to see how much he might be willing to sell his combine harvester for. It's said Mr B hasn’t provided any evidence that the value of MH would have increased so significantly compared to the auction prices referenced by its expert. And it has said that there is no evidence in support of Mr B’s assertion that the auction in 2019, which was conducted by its expert, was meant to have also been online, but wasn’t. Aviva has also pointed out that its expert sold the Massey Harris now owned by Mr B for £6,200 at an auction of 2012 when it was a non-runner and it was restored to working order and included in the abovementioned auction in 2019 with a reserve of £6,000; and didn’t sell. And it’s pointed out that, even if this auction did not take place online as it should have done, the fact remains that a reserve had been placed on it of £6,000, despite this being lower than the price achieved when it was a non-runner. And it’s seen no evidence of the price Mr S subsequently paid to purchase this combine harvester. Aviva has also said that it was Mr S who suggested that F had nearly finished restoring MH. And it’s said the only reasonable explanation for Mr S thinking this is that Mr B had told him this was the case. Finally, Aviva has pointed out that Mr B’s figure of £40,000 to sell his combine harvester was for the entire machine, whereas MH had its cutting implement detached from it at the time it was damaged. And it has suggested the settlement figure should be reduced to reflect the fact that F cannot claim for the undamaged cutting implement. And it’s pointed out that not including this would also reduce the estimated restoration cost. And it thinks that to decide otherwise would, in their view mean F profits from its loss, as it would have the undamaged cutting unit, as well as the money to buy a replacement with one on. 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. I have noted Aviva’s comments, but it remains my view that the fair and reasonable outcome to F’s complaint is for it to pay £50,000 in settlement of its claim for MH, plus interest as set out in my provisional decision. I’ve explained why and addressed the further comments and evidence Aviva has provided below. I have noted what Aviva has said about the basis of settlement and that it is on an indemnity

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basis. However, because MH can’t be repaired, the settlement clause which Aviva has quoted, and which applies, means that Aviva needs to pay the cost to F of replacing it. And I think this is likely to be £50,000. I do not think it would be fair and reasonable to reduce what Mr S has said it would cost Mr B to bring his Massey Harris 722 up to the standard MH was at to reflect inflation since the date MH was damaged. This is because I need to decide what the fair and reasonable outcome to F’s complaint is now, not what it was at the time of the loss. And F should not be penalised for the length of time it has taken to get to this point. I appreciate Aviva’s point that the cutting implement wasn’t on MH when it was damaged, but it would not be possible to replace it without this, so I do not think the fact it wasn’t damaged should be reflected in the replacement cost. However, if Aviva wants the cutting implement as salvage then it can collect it from Mr B. I accept Aviva’s expert is suitably qualified to value MH, as he has sold Massey Harris machinery before. However, this does not necessarily mean his valuation of MH is correct or that he has the same level of expertise as Mr B or Mr S. I appreciate he has adopted what he considers to be an industry standard approach. But I do not accept that adopting a standard approach necessarily works for some items, especially if they are extremely rare like MH. And it needs to be remembered that, as far as we know, MH was only one of four remaining Massey Harris 722s in the UK, and possibly only one of four remaining in the world. Plus, I think it is fair to say that Aviva’s expert’s original valuation of £6,500 was way too low, bearing in mind the evidence he had available to him at this point about MH. I appreciate Aviva thinks it would cost less than £50,000 to replace MH for the following reasons, which I think are worth repeating before I address them: • The Massey Harris 722 now owned by Mr S was in an auction in 2019 with a reserve of £6,000 and didn’t sell. It thinks this shows any money restoring it between 2012 when it sold for £6,200 and when Mr S was asked about selling it hadn’t increased its value. • There were over 500 in-person prospective buyers at this auction and the report on it suggests some of the lots found new owners in the USA. This suggests the auction was well advertised and buyers did attend from the USA. • It has not suggested the auction was online as well as in person. But it has provided a link to a Massey Harris Forum from 2019 which suggests that literature, toys and some memorabilia belonging to the seller, who I will refer to as Mr P, were in an online auction prior to the auction in which the Massey Harris 722 now owned by Mr S was for sale. And some items in this online auction did not make their reserve. I assume it thinks this shows that even if the auction including Mr S’s Massey Harris, at which Mr P was also the seller, had been online it still may not have sold for £6,000. • Mr S purchased his Massey Harris 722 later in 2019 for the reserve price in the auction of £6,000. And if Mr P truly believed it was worth more at this time, having spent a large amount on it, he would not have sold it for £6,000. • Mr S’s reference to still using his Massey Harris 722 suggests he carried out more than a basic level of repair to it. • Mr S is not a willing seller and there is no way of knowing whether he would actually be able to sell his Massey Harris 722 for £40,000. Mr B, on behalf of F, thinks the cost of replacing MH would be at least £50,000 for the following reasons, which I also think are worth repeating: • A couple I will refer to as Mr and Mrs K offered him somewhere around £90,000 for MH in 2022. He has provided a letter to him confirming this. So, he thinks it would actually cost him £90,000 to replace MH.

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• Mr S has said if he was willing to sell his Massey Harris 722 he would want £40,000 for it and MH was fully restored and it would cost around £10,000 to get Mr S’s one up to this standard. • Mr B is one of the leading experts on Massey Harris Combine Harvesters and Aviva’s expert – while qualified – is not an expert in these. In addressing Aviva’s further comments and evidence I think I do need to bear in mind that they have raised some valid points, which do call into question Mr B’s assertion that it would cost £90,000 to replace MH if this was actually possible. The first is the fact that Mr S’s Massey Harris 722 was undoubtably in an auction in 2019 with a reserve of £6,000 and it was sold for this amount to Mr S later the same year. This does seem odd, bearing in mind Mr P had clearly spent a great deal of money bringing it up to working condition. However, I am willing to accept Mr S’s testimony that he was able to buy his Massey Harris 722, possibly via a consortium according to Mr B, for £6,000 because he had been involved in restoring it. But this doesn’t explain why Mr P had it in an auction in 2019 with a reserve of £6,000 if he thought it should be selling for a lot more than this. Or the fact that, despite there being around 500 people at the auction, including it seems some buyers from the USA, no-one bought it. This having been said, I am persuaded by the evidence provided by Mr B, and what Mr P said when I spoke to him, that this auction wasn’t carried out online as well as in person. And I don’t think the fact that in a previous auction of literature, toys and memorabilia, some items didn’t sell, proves that if the auction for such a rare item as a Massey Harris 722 was online it wouldn’t have sold for a lot more than £6,000. Mr S has said he can’t understand why Mr P had his Massey Harris 722 up for sale with such a low reserve, bearing in mind his testimony that Mr P had spent around £15,000 on it. Unfortunately, when I spoke to Mr P, he didn’t recall the Massey Harris 722 being in the auction, so he could not explain why it had such a low reserve price. However, none of this alters the fact that the only recent evidence we have for what a Massey Harris 722 exactly the same as MH would currently sell for is Mr S’s testimony that he would sell his one for £40,000. I say this because it has not been possible for Mr B to get a selling price for the only other two Massey Harris 722s that are in the UK. And – despite what Aviva has said – I am satisfied from what Mr S and Mr B have said that the restoration of MH by F was complete, whereas Mr S’s Massey Harris 722 hadn’t been fully restored. So, bearing in mind the lack of evidence from Aviva of other Massey Harris 722’s for sale or sold at the figure it has suggested is a fair valuation in recent times. And taking into account the fact that the only one that there is actually a potential selling price for is Mr S’s one at £40,000, I am still willing to accept that this is what F would have to pay for a basically restored Massey Harris 722. And I am also willing to accept that Mr S and Mr B are experts in their field and that what is effectively their estimate of the cost of restoring Mr S’s Massey Harris up to the standard of MH would be £10,000. And from this I think it is fair to say the cost of replacing MH like for like would be most likely to be £50,000. Also, I do not feel I can ignore the fact that it seems someone was willing to pay around £90,000 for MH in 2022. This is evidence I have no reason to doubt. And I think this adds significant weight to the argument that it would cost at least £50,000 to replace MH. Especially as it seems this person is a Massey Harris enthusiast with significant knowledge of the likely value of MH. Ultimately, MH is a very rare item indeed. And the cost of replacing it is very hard to determine, which makes this case a very difficult one to decide. And I do not want to risk leaving F with less than it is really entitled to under its policy. And I consider the only way I can be sure I do not do this is to require Aviva to settle its claim for MH using a value of £50,000.

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I have of course noted Mr B’s view that F should receive interest on the full amount due in settlement of its claim, but it remains my view that F did have the option to accept an interim payment of £23,148.32 without accepting this in full and final settlement via its insurance broker and decided not to do so. So, I do not think it should be compensated for being without this part of the settlement. Putting things right For the reasons set out in my provisional decision and above, I have decided to uphold F’s complaint about Aviva Insurance Limited and require it to do the following: • Pay F £50,000 in settlement of its claim for MH. This payment is subject to Aviva taking ownership of the undamaged cutting implement if it wishes to do so. • Pay interest on the amount due above its interim offer of £23,148.32 at 8% per annum simple from one month after F made its claim to the date of payment.* * Aviva must tell F if it has made a deduction for income tax. And, if it has, how much it’s taken off. It must also provide a tax deduction certificate for F if asked to do so. This will allow F to reclaim the tax from His Majesty’s Revenue & Customs (HMRC) if appropriate. My final decision I uphold F’s complaint about Aviva Insurance Limited and require it to do what I’ve set out above in the ‘Putting things right’ section. Under the rules of the Financial Ombudsman Service, I’m required to ask F to accept or reject my decision before 23 February 2026. Robert Short Ombudsman

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