Class Claims Filed Against Progressive Insurance Over Undervalued Destroyed Cars
On July 27, 2021, class claims were filed in federal court in the Southern District of New York against insurance giant Progressive Corporation (“Progressive"), alleging that the company deceptively paid claimants less than the actual value for their vehicles that were completely destroyed.
In the complaint, named plaintiffs Dominick Volino and John Plotts allege that when they received payment for the loss of their totaled vehicles, they were provided with a valuation report prepared by a third-party vendor, Mitchell International. Plaintiffs claimed that the valuation report reflected a value substantially less than the actual value of the totaled vehicles. In the valuation report, customers are informed that while calculating the actual cash value of the totaled vehicle, Progressive applied Projected Sold Adjustments.
The plaintiffs argued in the complaint, that the Projected Sold Adjustments are (a) deceptive and unexplained, (b) contrary to appraisal standards and methodologies, (c) not based in fact, as they are contrary to the used car industry’s market pricing and inventory management practices, (d) not applied by Mitchell’s main competitor and (e) not applied by Progressive and Mitchell to insureds in any other state other than New York. The plaintiffs alleged that the Projected Sold Adjustments resulted in a significant downward adjustment to the base values of comparable vehicles used to calculate the actual cash value of insureds’ cars.
The plaintiffs are seeking to represent a Breach of Contract class made up of all persons who made a first-party claim on a policy of insurance issued by Progressive to a New York resident who received compensation for the total loss of a covered vehicle, where that compensation was based on a valuation report prepared by Mitchell and the actual cash value was decreased based upon Projected Sold Adjustments to the comparable vehicles used to determine actual cash value. The plaintiffs are also seeking to represent a Gen. Bus. Law Section 349 Class of all persons who made a claim on a policy of insurance issued by Progressive Corporation, or any of its subsidiary companies, to a New York resident who received compensation for the total loss of a covered vehicle, where that compensation was based on a valuation report prepared by Mitchell and the actual cash value was decreased based upon Projected Sold Adjustments to the comparable vehicles used to determine actual cash value. The suit brings causes of action for breach of contract and violation of N.Y Gen. Bus. Law Section 349.
The case is: Dominick Volino et al. v. Progressive Corp., Case No.: 1:21-cv-06243, in the U.S. District Court for the Southern District of New York.
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