Progressive Premier “Projected Sold Adjustments” Georgia Class Action

When vehicles are totaled, insurers use their actual cash value (ACV) to determine the payout to the policyholders. This class action alleges that Progressive Premier Insurance Company of Illinois unfairly apply a “Projected Sold Adjustment” to the prices of comparable vehicles, reducing their ACVs and thus reducing the amount it must pay out.

The class for this action is all Georgia citizens insured by Progressive Premier 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 vehicles, where the compensation was based on a valuation report prepared by Mitchell and where the ACV was decreased by a Projected Sold Adjustment to the prices of the comparable vehicles used to determine the ACV.

When an insured’s vehicle is totaled, the complaint alleges, Progressive Premier has the valuation report prepared by its 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 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 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).”

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

The plaintiff in this case, Michelle Bost, damaged her vehicle in an accident on August 10, 2017 and made a claim to her insurer, Progressive Premier.

The company declared the vehicle a total loss and had Mitchell prepare a valuation report. Mitchell’s report lists three comparable vehicles and applied to them Projected Sold Adjustments of $884, $751, and $464, respectively.

The complaint alleges that Progressive Premier did not provide any specific data about the comparable vehicles or any other explanation of industry practices to support these price reductions.

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.” 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 Premier] assumes always exists without any explanation or support.”

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