Progressive Casualty “Projected Sold Adjustment” to ACVs Connecticut Class Action

In determining payouts for totaled vehicles, insurance companies must calculate the vehicles’ actual cash value (ACV). But is it legitimate for an insurance company to subtract a “projected sold adjustment” from the values shown for comparable vehicles in the area? The complaint for this class action claims that Progressive Casualty Insurance Company applies a “deceptive and unexplained” projected sold adjustment to lower its payouts to insureds in Connecticut.

The class for this action is all Connecticut citizens insured by Progressive Casualty Insurance Company who, from the earliest allowable time through the date the class is certified in this case, received a settlement payment from Progressive Casualty Insurance Company for the total loss of a covered vehicle, based on a valuation report prepared by Mitchell, where the ACV of the vehicle was decreased by applying a projected sold adjustment to the prices of comparable vehicles used to determine the ACV.

The plaintiff in this case, Andrianna Thompson, was involved in an accident on or around January 1, 2019 that totaled her vehicle. The vehicle was insured by Progressive Casualty.

Progressive Casualty uses a third-party vendor Mitchell International, Inc. to provide valuation reports to determine the ACV of a totaled vehicle, the complaint alleges. Mitchell finds comparable vehicles in the geographic area and adjusts their prices based on differences in things like mileage, options, and equipment. After that, the complaint alleges, it applies something called a Projected Sold Adjustment that “reduces the value of the total loss vehicles and, thus, reduces the claim payment to the insured/claimant…”

The complaint alleges that this Projected Sold Adjustment is deceptive, contrary to appraisal standards, and not based in fact, because it “is contrary to the used car industry’s market pricing and inventory management practices.” The only explanation of this adjustment, the complaint claims, is a statement on the last page of the valuation report that says it is applied to “reflect consumer purchasing behavior (negotiating a different price than the listed price).”

In this case, Mitchell’s report showed five comparable vehicles, to each of which it applied a projected sold adjustment, which the complaint cites as a subtraction of $632, $647, $509, $723, and $550, respectively.

According to the complaint, Progressive Casualty does not provide any data to support the amounts for the Projected Sold Adjustments. The complaint alleges that each adjustment “do[es] not reflect market realities … and instead, runs contrary to customary automobile dealer practices and inventory management, where list prices are priced to reflect the intense competition in the context of internet pricing and comparison shopping.”

In fact, the complaint claims, a “negotiated price discount would be highly atypical” in the current market, and the Projected Sold Adjustment is therefore “improper to use in determining ACV.” The complaint 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 deals [Progressive Casualty] assumes exist and are easily obtainable.”

Article Type: Lawsuit
Topic: Insurance
Tags: Actual Cash Value, Auto Insurance, Incomplete payment of benefits due, Insurance