To determine the actual cash value (ACV) of vehicles that are totaled, Progressive Direct Insurance Company uses a third-party vendor, Mitchell International, Inc. But the complaint for this Idaho class action alleges that Progressive “systematically thumbs the scale” in its own favor by applying Projected Sold Adjustments to Mitchell’s valuations, in order to make smaller payouts to its insureds.
The class for this action is all persons who made a first-party claim on an insurance policy issued by Progressive Direct to a resident of Idaho who, from the earliest time allowable through the date the class certification order is entered in this case, received a payout for the total loss of a covered vehicle, where the payout was based on a valuation report prepared by Mitchell and the ACV was lowered based on Projected Sold Adjustments to the prices of comparable vehicles used to determine the ACV.
Mitchell prepares its valuation reports, the complaint alleges, by finding comparable vehicles in the totaled vehicle’s geographic area, then adjusts their prices based on things like mileage, options, and equipment. Then, Progressive has Mitchell apply a Projected Sold Adjustment that the complaint alleges pushes down the base values of the comparable vehicles used to calculate the ACV.
The only explanation given of this adjustment, the complaint claims, is a statement on the valuation report’s last page saying that it is applied to “reflect consumer purchasing behavior (negotiating a different price than the listed price).” But the complaint alleges that this Projected Sold Adjustment is arbitrary, not based on real data, and “contrary to the used car industry’s market pricing and inventory management practices[.]”
The plaintiff in this case, Seiyid ElAmin, was involved in an accident on October 19, 2021. He made a claim to Progressive, which had Mitchell prepare a valuation report.
Mitchell came up with three comparable vehicles, the complaint claims, to which it applied Projected Sold Adjustments of $673, $776, and $621, respectively.
The complaint alleges that Progressive Direct “provides no data specific to the comparable vehicles or any explanation of industry practices in its valuation reports to support any Projected Sold Adjustment, much less the specific downward adjustments” in the report for ElAmin’s vehicle.
Negotiation is no longer the norm in the market for used vehicles, the complaint alleges. “Instead,” the complaint claims, “car dealerships use sophisticated pricing software … and now appraise vehicles before acquiring them to price them to market and do not negotiate from that price.” If a vehicle was in fact advertised at a higher price to allow room for negotiation, the complaint alleges, customers would simply go to a different dealership that advertised lower prices.
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
Progressive Direct “Projected Sold Adjustments” Idaho Complaint
January 23, 2023
To determine the actual cash value (ACV) of vehicles that are totaled, Progressive Direct Insurance Company uses a third-party vendor, Mitchell International, Inc. But the complaint for this Idaho class action alleges that Progressive “systematically thumbs the scale” in its own favor by applying Projected Sold Adjustments to Mitchell’s valuations, in order to make smaller payouts to its insureds.
Progressive Direct “Projected Sold Adjustments” Idaho ComplaintCase Event History
Progressive Direct “Projected Sold Adjustments” Idaho Complaint
January 23, 2023
To determine the actual cash value (ACV) of vehicles that are totaled, Progressive Direct Insurance Company uses a third-party vendor, Mitchell International, Inc. But the complaint for this Idaho class action alleges that Progressive “systematically thumbs the scale” in its own favor by applying Projected Sold Adjustments to Mitchell’s valuations, in order to make smaller payouts to its insureds.
Progressive Direct “Projected Sold Adjustments” Idaho Complaint