Progressive Universal “Projected Sold Adjustments” Nebraska Class Action

When a vehicle is totaled in an accident, the insurance company must calculate the vehicle’s actual cash value (ACV) in order to determine the payout. The complaint for this class action alleges that Progressive Universal Insurance Company “systematically thumbs the scale” in its own favor by applying something called a Projected Sold Adjustment that the complaint alleges is arbitrary, unfair, and unrealistic as to current practices in the used car market.

The class for this action is all persons who made a first-party claim on an insurance policy issued by Progressive Universal Insurance Company to a Nebraska resident who, between the earliest allowable time and the date the class is certified in this case, received compensation for the total loss of a covered vehicle, where the compensation was based on a vehicle valuation report prepared by Mitchell and the ACV was decreased based on Projected Sold Adjustments to the comparable vehicles used to determine the ACV.

When Progressive Universal attempts to establish a totaled vehicle’s ACV, the complaint alleges, it uses a valuation report prepared by Mitchell International, Inc. in a certain way. That is, the complaint alleges that Progressive Universal has Mitchell find comparable vehicles in the relevant market, make price adjustments according to their mileage, options, and equipment, and then apply something called a Projected Sold Adjustment to reduce most of the prices further.

The only explanation of this Projected Sold Adjustment, the complaint claims, is on the last page of the valuation report, saying that it is meant to “reflect consumer purchasing behavior (negotiating a different price than the listed price).”

The complaint alleges, “This reduction is contrary to appraisal standards and methodologies and is not based in fact, as it is contrary to the used car industry’s market pricing and inventory management practices.”

For example, the plaintiff in this case, Karen Stromquist, was had an accident in November 2016 that totaled her vehicle. Progressive Universal declared it a total loss, and Mitchell came up with a valuation report showing seven comparable vehicles. Projected Sold Adjustments of $818, $497, $611, $614, $701, $573, and $857 were applied to the seven vehicles, respectively.

The complaint alleges that neither Mitchell nor Progressive Universal have done any research to support these adjustments, with all the considerations in the present-day market for used cars. Nowadays, the complaint alleges, “the used auto market is such that, given the ubiquity of Internet advertising and shopping and developments in sophisticated pricing software, car dealerships simply do not negotiate off of Internet-advertised prices.”

The complaint calls the adjustments “capricious and unjustified” and says they “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.”

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