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Progressive Direct ACV Reduced by Adjustment South Carolina Class Action

When a vehicle is deemed a total loss after an accident, Progressive Direct Insurance Company is supposed to pay the insured owner the vehicle’s actual cash value (ACV). But the complaint for this South Carolina class action alleges that Progressive unfairly applies something called a Projected Sold Adjustment to its valuations. This adjustment results in a payout of less than the vehicle’s true ACV because it assumes the insureds will be able to negotiate for a price that is significantly lower than the prices advertised for comparable vehicles.

The class for this action is all residents of South Carolina insured with Progressive who, from the earliest allowable time through the date of resolution of this action, received a first-party total loss valuation and payment that included a downward adjustment via a Projected Sold Adjustment or similar adjustment.

Progressive gets its valuations for totaled vehicles from a company called Mitchell International, Inc. The complaint alleges that, by using these reports, “Progressive systemically thumbs the scale against its insureds when calculating the actual cash value of their [total] loss vehicles by applying so-called ‘Projected Sold Adjustments.’” According to the complaint, Progressive does this “without any documentation that the assumed discount was available.”

The adjusted prices are not actually available to the average person going out to buy a used car, the complaint claims: “These adjustments are based on the factually erroneous assumption … insureds would be able to negotiate a reduction in the list price of comparable used automobiles, which … would be highly a typical and contrary to the modern used car industry’s market pricing and inventory management practices.”

The application of these adjustments runs contrary to normal appraisal practices, the complaint alleges, which “do not permit arbitrary adjustments not based on observed and verifiable data.”

The questionable nature of these adjustments is shown by two things, the complaint claims: first, that Mitchell’s main competitor does not use them, and second, that Progressive does not apply them to insureds in states other than South Carolina. According to the complaint, the practice of applying these adjustments violates Progressive’s contracts with its insureds.

Lynn Freeman, the plaintiff in this case, owned a 2020 Chevrolet Equinox LS that was totaled in an accident at some time around May 2021. She was insured by Progressive, which obtained a valuation for the vehicle from Mitchell. The valuation amount was determined by taking the prices of three different comparable vehicles advertised for sale online and applying a Projected Sold Adjustment of around 5% to each.

The complaint alleges that Progressive did not supply any documentation for the vehicles in the report or for current sales practices that would support the discount. The only explanation is on the last page of the report, which states, “Projected Sold Adjustment—an adjustment to reflect consumer purchasing behavior (negotiating a different price than the listed price).”

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Progressive Direct ACV Reduced by Adjustment South Carolina Complaint

November 19, 2021

When a vehicle is deemed a total loss after an accident, Progressive Direct Insurance Company is supposed to pay the insured owner the vehicle’s actual cash value (ACV). But the complaint for this South Carolina class action alleges that Progressive unfairly applies something called a Projected Sold Adjustment to its valuations. This adjustment results in a payout of less than the vehicle’s true ACV because it assumes the insureds will be able to negotiate for a price that is significantly lower than the prices advertised for comparable vehicles.

Progressive Direct ACV Reduced by Adjustment South Carolina Complaint

Case Event History

Progressive Direct ACV Reduced by Adjustment South Carolina Complaint

November 19, 2021

When a vehicle is deemed a total loss after an accident, Progressive Direct Insurance Company is supposed to pay the insured owner the vehicle’s actual cash value (ACV). But the complaint for this South Carolina class action alleges that Progressive unfairly applies something called a Projected Sold Adjustment to its valuations. This adjustment results in a payout of less than the vehicle’s true ACV because it assumes the insureds will be able to negotiate for a price that is significantly lower than the prices advertised for comparable vehicles.

Progressive Direct ACV Reduced by Adjustment South Carolina Complaint
Tags: Auto Insurance, Incomplete payment of benefits due, Insurance