Westfield National ACVs Reduced by Projected Sold Adjustment Illinois Class Action

If a vehicle is totaled in an accident, how is the actual cash value (ACV) calculated to determine the insurance payout? The complaint for this class action alleges that Westfield National Insurance Company “systematically thumbs the scale” by requiring that a “Projected Sold Adjustment” be deducted from the prices of comparable vehicles used for valuation. The complaint claims these reductions in ACV are not justified and not based in fact.

The class for this action is all Illinois citizens insured by Westfield 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 based on a valuation report prepared by Mitchell where the ACV was decreased by Projected Sold Adjustments to the comparable vehicles used to determine ACV.

When it declares a vehicle a total loss, Westfield uses Mitchell International, Inc. to provide a valuation report to determine the vehicle’s ACV. However, the complaint alleges Westfield requires that Mitchell subtract a Projected Sold Adjustment from comparable vehicles’ values and that this adjustment is deceptive, unexplained, contrary to appraisal standards, and not based in fact.

Mitchell finds comparable vehicles in the relevant geographic area, adjusts their prices based on differences such as mileage, options, and equipment, then applies the Projected Sold Adjustment on top of that. The only explanation of this adjustment, the complaint claims, is a statement on the last page of the valuation report that says that it is subtracted to “reflect consumer purchasing behavior (negotiating a different price than the listed price).”

According to the complaint, Westfield does not provide any data to support the amounts that are subtracted from the vehicle valuations provided in the report. But the complaint alleges that the Projected Sold Adjustments “do not reflect market realities … and run contrary to customary automobile dealer practices and inventory management, where list prices are pried to reflect the intense competition in the context of internet pricing and comparison shopping.”

“A negotiated price discount would be highly atypical” in the current market, the complaint claims, and it therefore “is not proper to include in determining actual cash value.” It also points out that those who have lost their vehicles generally need to find new transportation immediately and do not have time to seek out “the illusory opportunity to obtain the below-market deal [Westfield] assumes always exists…”

The complaint also claims that the projected sold adjustments are “contrary to appraisal standards.” It claims that Mitchell’s main competitor for valuation reports, CCC Intelligent Solutions, does not apply projected sold adjustments but uses list prices.

The complaint thus alleges that the Projected Sold Adjustment is “deceptive and improper” and results in insured receiving a smaller payout for their totaled vehicle than they would have otherwise.

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