When an insurance company deems repair of a damaged vehicle to be impossible or not cost-effective, it may declare the vehicle to be a total loss and choose to pay the insured the vehicle’s actual cash value (ACV). However, the complaint for this class action claims that Twin City Fire Insurance Company unfairly reduces these payouts by applying “Projected Sold Adjustments” to the prices of comparable vehicles.
The class for this action is all Missouri citizens insured by Twin City 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 an automobile total loss claim that included a Projected Sold Adjustment or a similar adjustment.
The complaint alleges that Twin City uses a third-party vendor to come up with valuations for comparable vehicles in the appropriate market, and that it directs this vendor then to apply to each a Projected Sold Adjustment that the complaint calls “arbitrary, baseless, and illegal[.]”
In December 2018, the plaintiff for this class action, Roy Schoenholtz, had an accident that damaged his vehicle. Twin City declared the vehicle a total loss.
The complaint alleges that Twin City used a Mitchell Valuation Report to determine values of comparable vehicles for sale or recently sold in Schoenholtz’s geographic area. Mitchell, as is usual, then adjusts the prices of these vehicles to account for differences in equipment, mileage, and configuration. However, the complaint alleges that the report for Twin City has an additional step, the application of the Projected Sold Adjustment.
The Valuation Report for Schoenholtz’s vehicle, the complaint alleges, showed prices for ten comparable vehicles, from nine of which it subtracted Projected Sold Adjustments of $1,384, $1,263, $1,385, $1,037, $1,362, $1,615, $1,233, $974, and $1,289, respectively.
The complaint alleges that Twin City “provides no data specific to the comparable vehicles or any explanation of industry practices in its valuation reports to support any Projected Sold Adjustment…. Instead, the only explanation is buried on the last page of each report, stating in full: ‘Projected Sold Adjustment—an adjustment to reflect consumer purchasing behavior (negotiating a different price than the listed price).”
The complaint alleges that these adjustments are “deceptive” because 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.” Negotiated prices that are lower than the advertised price, the complaint claims, are therefore now “highly atypical and [] improper to to include in determining ACV.”
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
Twin City Fire Insurance Projected Sold Adjustments Missouri Complaint
July 22, 2022
When an insurance company deems repair of a damaged vehicle to be impossible or not cost-effective, it may declare the vehicle to be a total loss and choose to pay the insured the vehicle’s actual cash value (ACV). However, the complaint for this class action claims that Twin City Fire Insurance Company unfairly reduces these payouts by applying “Projected Sold Adjustments” to the prices of comparable vehicles.
Twin City Fire Insurance Projected Sold Adjustments Missouri ComplaintCase Event History
Twin City Fire Insurance Projected Sold Adjustments Missouri Complaint
July 22, 2022
When an insurance company deems repair of a damaged vehicle to be impossible or not cost-effective, it may declare the vehicle to be a total loss and choose to pay the insured the vehicle’s actual cash value (ACV). However, the complaint for this class action claims that Twin City Fire Insurance Company unfairly reduces these payouts by applying “Projected Sold Adjustments” to the prices of comparable vehicles.
Twin City Fire Insurance Projected Sold Adjustments Missouri Complaint