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Progressive Actual Cash Value Negotiation Adjustment New York Class Action

When a vehicle is totaled in an accident, the insurance company must determine the actual cash value (ACV) of the vehicle. Progressive Corporation, which does business as Progressive and Progressive Group of Insurance Companies, uses valuation reports from a vendor called Mitchell International, Inc. to make that determination, but the complaint for this class action alleges that Progressive improperly tilts values in its own favor by applying something called Projected Sold Adjustments.

These reports show values of comparable vehicles recently offered for sale or sold in the customer’s geographic area. The report then makes adjustments to the advertised prices, the complaint says, “to account for differences in equipment, mileage, and vehicle configuration.”

However, the reports used by Progressive make an additional adjustment, called the Projected Sold Adjustment. This may amount to hundreds of dollars in reductions for each vehicle.

The complaint alleges, “Progressive provides no data specific to the comparable vehicles or any explanation of industry practices in its valuation reports to support any Project Sold Adjustment…. Instead, the only explanation is buried on the last page of each report, stating in full: ‘Projected Sold Adjustment—an adjustment to reflect consumer purchasing behavior (negotiating a different price than the listed price).’”

The complaint declares that this adjustment is deceptive. Progressive does not offer any calculation or justification of the specific amount of the adjustment.

Also, the complaint claims that the adjustments “do not reflect market realities” because auto dealers price vehicles “to reflect the intense competition in the context of [I]nternet pricing and comparison shopping.” It says a negotiated price is not appropriate, because “insureds who have suffered a total loss of their vehicle and need to procure a replacement and have limited time to search out the illusory opportunity to obtain the below-market deal Progressive assumes always exists without any explanation or support.”

In addition, the adjustments go against appraisal standards, the complaint says: “Appraisers use advertised prices and only make adjustments based on observed and verifiable data; appraisal standards do not permit arbitrary adjustments from the advertised price based upon undocumented and unverifiable projections.”

Finally, the complaint points out that Mitchell’s main competitor in providing valuation reports, CCC Intelligent Solutions, does not apply Projected Sold Adjustments.

Two classes have been defined for this action:

The Breach of Contract Class is all persons who made a first-party claim on an insurance policy issued by Progressive or any of its subsidiaries to a New York resident who, from the earliest allowable time through the date of resolution in this case, received compensation for the total loss of a covered vehicle based on a valuation report prepared by Mitchell where the actual cash value was decreased by Projected Sold Adjustments to comparable vehicles.

The General Busines Law § 349 Class is the same, except that it specifies “persons who made a claim” and not only those who “made a first-party claim.”

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Progressive Actual Cash Value Negotiation Adjustment New York Complaint

July 22, 2021

When a vehicle is totaled in an accident, the insurance company must determine the actual cash value (ACV) of the vehicle. Progressive Corporation, which does business as Progressive and Progressive Group of Insurance Companies, uses valuation reports from a vendor called Mitchell International, Inc. to make that determination, but the complaint for this class action alleges that Progressive improperly tilts values in its own favor by applying something called Projected Sold Adjustments.

Progressive Actual Cash Value Negotiation Adjustment New York Complaint

Case Event History

Progressive Actual Cash Value Negotiation Adjustment New York Complaint

July 22, 2021

When a vehicle is totaled in an accident, the insurance company must determine the actual cash value (ACV) of the vehicle. Progressive Corporation, which does business as Progressive and Progressive Group of Insurance Companies, uses valuation reports from a vendor called Mitchell International, Inc. to make that determination, but the complaint for this class action alleges that Progressive improperly tilts values in its own favor by applying something called Projected Sold Adjustments.

Progressive Actual Cash Value Negotiation Adjustment New York Complaint
Tags: Actual Cash Value, Auto Insurance, Insurance, Unfair Business Practices