Progressive Gulf, Mountain Laurel “Projected Sold Adjustments” Mississippi Class Action

When a vehicle is totaled, insurance companies must determine its actual cash value (ACV) in order to calculate the payout to policyholders. This class action brings suit against Progressive Gulf Insurance Company and Mountain Laurel Assurance Company, alleging they unfairly apply a “Projected Sold Adjustment” to the prices of comparable vehicles, in order to lower the amounts they must pay out.

The class for this action is all Mississippi citizens insured by Progressive Gulf or Mountain Laurel who, from the earliest allowable time through the date the class is certified in this case, received compensation for the total loss of a covered vehicle, based on a valuation report prepared by Mitchell, where the ACV of the covered vehicle was decreased by applying Projected Sold Adjustments to the prices of the comparable vehicles.

In determining the ACV of a totaled vehicle, the two companies rely on valuation reports from third-party vendor Mitchell International, Inc.

Mitchell finds comparable vehicles in the area and adjusts their prices based on things like mileage, options, and equipment. Then, the complaint alleges, the two companies, acting through Mitchell, “systematically [apply] a so-called ‘Projected Sold Adjustment’ that results in a significant downward adjustment to the base values of the comparable vehicles[.]”

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).”

The complaint alleges that this Projected Sold Adjustment is deceptive, contrary to appraisal standards, and “contrary to the used car industry’s market pricing and inventory management practices.”

The two plaintiffs in this case, Betty Vantree and Cynthia Rayborn, each had a vehicle totaled in an accident, in May 2019 and May 2021, respectively.

Vantree’s vehicle was insured by Progressive. Mitchell’s valuation report showed nine comparable vehicles, with Projected Sold Adjustments for six of them, in the amounts of $832, $956, $916, $787, $1,048, and $896.

Rayborn’s vehicle was insured by Mountain Laurel. Mitchell’s valuation report showed four comparable vehicles, with Projected Sold Adjustments in the amounts of $1,280, $1,048, $1,205, and $1,318.

Neither insurance company provided any data about the specific vehicles or about industry practices that might have justified the reductions to the comparable vehicles’ prices, the complaint claims.

It alleges that the adjustments “do not reflect market realities … and run 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 and therefore is not proper to include in determining ACV.” Those who have lost their vehicles, the complaint claims, generally need to find a replacement immediately and do not have time to loof for “the illusory opportunity to obtain the below-market deal [the companies] assume always exists without any explanation or support.”

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