Progressive Paloverde Insurance Adjustment to Payout Louisiana Class Action

When a vehicle is totaled in an accident, how may insurers calculate the actual cash value (ACV) of the vehicle to determine a payout? The complaint for this class action brings suit against Progressive Paloverde Insurance Company for subtracting a “projected sold adjustment” from its market value findings, which assumes that the consumer can achieve a successful negotiation at a fixed rate to lower the price of similar vehicle.

The class for this action is all Louisiana citizens insured by Progressive Paloverde who, from the earliest allowable time through the date the class is certified in this case, received a first-party, total-loss valuation and payment on a vehicle total loss claim that included a “projected sold adjustment.”

The plaintiff in this case, Robie Kinsley, had an accident that totaled Kinsley’s 2014 Chevrolet Cruze. Progressive Paloverde, the insurer, obtained a report listing comparable vehicles, then applied a “projected sold adjustment” of around 7-8% “without itemizing or explaining the basis” for this adjustment.

Louisiana law offers auto insurers three ways to determine the ACV of a totaled vehicle. These include a survey of qualified retail dealers in the local market, the “retail cost as determined from a generally recognized used motor vehicle industry source…” or the opinion of an expert appraiser agreed to by both the insurer and insured. The complaint claims, “This requirement prevents insurers from artificially devaluing totaled vehicles by using unreliable Craigslist postings from private sellers, or suspect price listings from ‘buy-here-pay-here’ type car sellers.”

The complaint alleges that Progressive Paloverde “fails entirely to abide by such requirements[.]”

When a vehicle is declared a total loss, Progressive Paloverde first uses a third-party company, Mitchell, to produce a Mitchell Vehicle Valuation Report. This locates comparable vehicles for sale that are sold or listed online. But it doesn’t end there. The complaint alleges, “Mitchell then, at [Progressive Paloverde’s] directive, applies a deceptive and arbitrary ‘projected sold adjustment,’ which artificially reduces that ‘market value’ of the comparable vehicles.”

“Upon information and belief,” the complaint claims, this adjustment “is a blanket percentage reduction of the selling price of a comparable vehicle based on the listing price. Rather than basing [its] adjustment on any tangible features of the available vehicle which may relate to consumer negotiations, the ‘projected sold adjustment’ is arbitrarily applied as a universal percentage reduction to any vehicle in a given price range.”

The complaint calls this adjustment “arbitrary and unsupportable.” Progressive Paloverde provides no support for the figure, the complaint claims, but just asserts there is some average difference between a listing price and what a dealer would be willing to accept.

“However,” the complaint contends, “an across-the-board 7-8% reduction on used vehicles’ internet prices is not typical and does not reflect market realities…” Neither is the deduction permitted by Louisiana law or the policy itself, the complaint says. In fact, the complaint points out, some dealerships do not permit price negotiations.

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