When a vehicle is declared a total loss, the insurance company must be calculated an actual cash value (ACV) for the vehicle in order to make a payout for the loss to the insured. The complaint for this class action alleges that Progressive Advanced Insurance Company unfairly reduces the amount of the payout by having its valuation vendor apply a “Projected Sold Adjustment” that the complaint says is not justified and not based in fact.
The class for this action is all Missouri citizens who, between the earliest time allowable and the date the class is certified, received compensation for the total loss of a covered vehicle based on a valuation report prepared by Mitchell where the ACV was decreased by projected sold adjustments to the comparable vehicles used to determine the ACV.
Progressive uses a third party, Mitchell International, Inc., to provide valuation reports to determine a total-loss vehicle’s ACV.
However, the complaint alleges that Progressive “systematically thumbs the scale … by applying so-called ‘Projected Sold Adjustments’” and that these adjustments are deceptive, unexplained, contrary to appraisal standards, and not based in fact.
The projected sold adjustment is applied to comparable vehicles after their prices have been adjusted for differences such as mileage, options, and equipment. The only explanation, the complaint claims, is a statement on the last page of the valuation report that says it is subtracted to “reflect consumer purchasing behavior (negotiating a different price than the listed price).”
Progressive does not provide any data to support the particular amounts subtracted from the vehicle valuations provided in the report. But the complaint alleges that the projected sold adjustments “do not reflect market realities … and run contrary to customary automobile dealer practices and inventory management, where list prices are pried to reflect the intense competition in the context of internet pricing and comparison shopping.”
“A negotiated price discount would be highly atypical” in the current market, the complaint claims, and it therefore “is not proper to include in determining actual cash value.” It also points out that those who have lost their vehicles generally need to find new transportation immediately and do not have time to seek out “the illusory opportunity to obtain the below-market deal [Progressive] assumes always exists…”
The complaint also claims that the projected sold adjustments are “contrary to appraisal standards.” It points out that Mitchell’s main competitor for valuation reports, CCC Intelligent Solutions, does not apply projected sold adjustments, and that other insurance companies in the Progressive Group do not apply them when calculating ACVs in California.
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
Progressive Advanced “Projected Sold Adjustment” to ACVs Missouri Complaint
March 24, 2022
When a vehicle is declared a total loss, the insurance company must be calculated an actual cash value (ACV) for the vehicle in order to make a payout for the loss to the insured. The complaint for this class action alleges that Progressive Advanced Insurance Company unfairly reduces the amount of the payout by having its valuation vendor apply a “Projected Sold Adjustment” that the complaint says is not justified and not based in fact.
Progressive Advanced “Projected Sold Adjustment” to ACVs Missouri ComplaintCase Event History
Progressive Advanced “Projected Sold Adjustment” to ACVs Missouri Complaint
March 24, 2022
When a vehicle is declared a total loss, the insurance company must be calculated an actual cash value (ACV) for the vehicle in order to make a payout for the loss to the insured. The complaint for this class action alleges that Progressive Advanced Insurance Company unfairly reduces the amount of the payout by having its valuation vendor apply a “Projected Sold Adjustment” that the complaint says is not justified and not based in fact.
Progressive Advanced “Projected Sold Adjustment” to ACVs Missouri Complaint