When a vehicle is totaled in an accident, the insurance company must determine its actual cash value (ACV) in order to make a payout to the insured. But the complaint for this class action alleges that Progressive Direct Insurance Company unfairly reduces its payouts by taking the valuations provided by its vendor, Mitchell International, Inc., and applying something it calls a Projected Sold Adjustment.
The class for this action is all Kentucky citizens insured by Progressive who, from the earliest allowable date through the date the class is certified in this case, received compensation for the total loss of a covered vehicle, where that compensation was based on a vehicle valuation report prepared by Mitchell and the ACV was decreased based upon Projected Sold Adjustments to the comparable vehicles used to determine the ACV.
The complaint alleges that Progressive uses Mitchell to provide valuation reports for vehicles that are comparable to the one that was totaled. Mitchell finds similar vehicles in the same geographic area and adjusts the prices based on thing like mileage, options, and equipment.
Then, the complaint alleges, the company, acting through Mitchell, “systematically applies a so-called ‘Projected Sold Adjustment’ that results in a significant downward adjustment to the base values of the comparable vehicles…”
The only explanation for 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).”
But the complaint claims this Projected Sold Adjustment is arbitrary, and that neither Mitchell nor Progressive has ever researched whether this behavior exists or plays a part in the current market.
In this case, plaintiff Melissa Watson was involved in an accident that totaled her vehicle. Her insurer was Progressive. Mitchell prepared a valuation report with three comparable vehicles to which Projected Sold Adjustments of $784, $921, and $1,008 were applied.
According to the complaint, these adjustments “do not reflect market realities … and run contrary to customary automobile dealer practices and inventory management, where list prices are priced to market to reflect the intense competition in the context of Internet pricing and comparison shopping.” In fact, the complaint claims, “a negotiated discount off the cash price is highly atypical and is not proper to include in determining ACV.”
In addition, those who have lost their vehicles, the complaint claims, generally need to find a replacement immediately and do not have time to look for “the illusory opportunity to obtain the below-market deal [Progressive] assumes always exists without any explanation or support.”
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
Progressive Direct Projected Sold Adjustments to ACVs Kentucky Complaint
August 4, 2022
When a vehicle is totaled in an accident, the insurance company must determine its actual cash value (ACV) in order to make a payout to the insured. But the complaint for this class action alleges that Progressive Direct Insurance Company unfairly reduces its payouts by taking the valuations provided by its vendor, Mitchell International, Inc., and applying something it calls a Projected Sold Adjustment.
Progressive Direct Projected Sold Adjustments to ACVs Kentucky ComplaintCase Event History
Progressive Direct Projected Sold Adjustments to ACVs Kentucky Complaint
August 4, 2022
When a vehicle is totaled in an accident, the insurance company must determine its actual cash value (ACV) in order to make a payout to the insured. But the complaint for this class action alleges that Progressive Direct Insurance Company unfairly reduces its payouts by taking the valuations provided by its vendor, Mitchell International, Inc., and applying something it calls a Projected Sold Adjustment.
Progressive Direct Projected Sold Adjustments to ACVs Kentucky Complaint