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Progressive Casualty “Projected Sold Adjustment” New York Class Action

How does an insurance company calculate the actual cash value (ACV) of a vehicle that has been totaled in an accident? The complaint for this class action alleges that Progressive Casualty Insurance Company determines the cost of “comparable vehicles” but then subtracts a “projected sold adjustment” that unfairly lowers the amount of the payout to the customer.

The class for this action is all New York citizens insured by Progressive who, from the earliest allowable time through the date the class is certified in this case, received a first-party, total-loss valuation and payment on a vehicle total loss claim that included a projected sold or similar adjustment.

Under New York laws, insurance companies may use computerized databases to help determine a totaled vehicle’s ACV. Among other requirements, the computerized database must “produce statistically valid fair market values for a substantially similar vehicle, within the local market area.”

Progressive uses a third-party vendor, Mitchell, and its product, the Mitchell Vehicle Valuation Report, which the complaint says “identifies the list price of comparable vehicles sold or listed for sale online.”

But after that, the complaint alleges, Mitchell takes another step: “Mitchell then, at [Progressive’s] directive, applies a deceptive and arbitrary ‘projected sold adjustment,’ which artificially reduces that ‘market value’ of the comparable vehicles.”

Where does this number come from? The complaint suggests, “on information and belief,” that this is “a blanket percentage reduction of the selling price of a comparable vehicle based on the listing price” that “is arbitrarily applied as a universal percentage reduction to any vehicle in a given price range.”

The explanation given for the projected sold adjustment is that it’s “an adjustment to reflect consumer purchasing behavior (negotiating a different price than the listed price).” “However,” the complaint alleges, “an across-the-board 5-6% reduction on used vehicles’ internet prices is not typical and does not reflect market realities, and neither New York Law nor the Policy permit [Progressive] to make this arbitrary deduction.”

Progressive takes this adjustment “without contacting the identified dealerships or considering whether the online retailer ever discounts its vehicle[,]” the complaint says, and the company “failed to consider that most used car dealerships banned price negotiation by implementing ‘no haggle’ pricing or that … given certain market forces, even the few car dealers that might negotiate prices listed in-person on car lots do not negotiate the price listed online.”

Progressive also does not provide documentation to support the projected sold adjustments, the complaint alleges, that is arbitrary [and] capricious” and “cannot be a reflection of market realities given that … it is based on national data, not market data.”

“Notably,” the complaint claims, “and for reasons unknown, [Progressive] does not instruct Mitchell to apply a ‘projected sold adjustment’ to comparable vehicle in all states in which it operates.” And other insurers who use Mitchell, it claims, do not ask it to apply a projected sold adjustment to the comparable vehicles.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Progressive Casualty “Projected Sold Adjustment” New York Complaint

July 28, 2021

How does an insurance company calculate the actual cash value (ACV) of a vehicle that has been totaled in an accident? The complaint for this class action alleges that Progressive Casualty Insurance Company determines the cost of “comparable vehicles” but then subtracts a “projected sold adjustment” that unfairly lowers the amount of the payout to the customer.

Progressive Casualty “Projected Sold Adjustment” New York Complaint

Case Event History

Progressive Casualty “Projected Sold Adjustment” New York Complaint

July 28, 2021

How does an insurance company calculate the actual cash value (ACV) of a vehicle that has been totaled in an accident? The complaint for this class action alleges that Progressive Casualty Insurance Company determines the cost of “comparable vehicles” but then subtracts a “projected sold adjustment” that unfairly lowers the amount of the payout to the customer.

Progressive Casualty “Projected Sold Adjustment” New York Complaint
Tags: Actual Cash Value, Auto Insurance, Incomplete payment of benefits due, Insurance