Progressive Direct Impermissible Deductions from ACV Washington Class Action

How should an insurance company calculate the actual cash value (ACV) of a vehicle it declares a total loss? Progressive Direct Auto Insurance Company does it incorrectly, alleges the complaint for this class action, taking “unsupported, impermissible and unverifiable” adjustments, which are always deductions, from the price of comparable vehicles.

The class for this action is all Progressive insureds with Washington first party personal line policies issued in Washington who received compensation for a total loss of their own vehicles under their First Party Comprehensive, Collision, or UIM coverages, and who received a total loss valuation from Mitchell based upon the value of comparable vehicles which took a deduction for a Projected Sold Adjustment.

Plaintiff Ameenjohn Stanikzy was involved in an accident on October 9, 2019. The vehicle, a 2007 Lexus GS 350 AWD, was insured with Progressive Direct. The company declared the vehicle to be a total loss, which meant that Progressive Direct had to pay Stanikzy the ACV of the vehicle.

When Progressive calculates the ACV of a vehicle declared a total loss, it uses Market Survey Report (MSR) prepared for it by a vendor called Mitchell International, Inc.

The complaint alleges that Mitchell’s MSR takes “an unsupported, impermissible and unverifiable ‘adjustment’ (which is always a deduction…)” and that this “deduction is used to reduce the price of each of the comparable vehicles on the report, which … results in a substantial deduction (on information and belief on average approximately 6.5% across Class Members’ total loss valuations) in the ACV” that Progressive Direct pays to its insureds. 

Stanikzy’s report lists a base value of $8,131. The base value is supposed to be the average of the price of comparable vehicles, the complaint says. 

The two comparable vehicles listed have higher prices. Progressive Direct adjusted the prices to reflect equipment and mileage, which is allowed in Washington state. It then took a Projected Sold Adjustment, which the complaint says is not permitted under the law, because the relevant section of the law begins, “Insurers may adjust a total loss settlement through the following methods only…”

Also, the complaint says, the law “requires the insurer to use prices that are both local and ‘current data’…” The Projected Sold Amount, it says, is neither. “Instead, upon information and belief, Mitchell has obtained national data reflecting the prices reported to State DMVs as to the cash component of the transaction (i.e., what is taxable), and compared this to what they believe to be the listed price for the same vehicle from [their] data base. The difference in these figures is then claimed to be the reduction in price due to negotiation.”

However, these figures do not reflect any credit given on a trade-in, and people may also report lower prices so that they can pay less in tax. 

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Progressive Direct Impermissible Deductions from ACV Washington Complaint

January 24, 2020

How should an insurance company calculate the actual cash value (ACV) of a vehicle it declares a total loss? Progressive Direct Auto Insurance Company does it incorrectly, alleges the complaint for this class action, taking “unsupported, impermissible and unverifiable” adjustments, which are always deductions, from the price of comparable vehicles.

progressive_direct_auto_ins_acv_complaint.pdf

Case Event History

Progressive Direct Impermissible Deductions from ACV Washington Complaint

January 24, 2020

How should an insurance company calculate the actual cash value (ACV) of a vehicle it declares a total loss? Progressive Direct Auto Insurance Company does it incorrectly, alleges the complaint for this class action, taking “unsupported, impermissible and unverifiable” adjustments, which are always deductions, from the price of comparable vehicles.

progressive_direct_auto_ins_acv_complaint.pdf
Tags: Actual Cash Value, Auto Insurance, Insurance