Progressive faces lawsuit for allegedly undervaluing totaled cars

Progressive faces lawsuit for allegedly undervaluing totaled cars | Insurance Business America

Progressive faces lawsuit for allegedly undervaluing totaled cars

A lawsuit has been filed against Progressive Advanced Insurance Company which claims that the company uses inaccurate valuation reports to underpay customers with totaled vehicles.

The plaintiff, Yeshonda Driggins, has claimed that Progressive utilizes valuation reports by Mitchell International which apply “projected sold adjustments.” These adjustments, she argued, are “contrary to appraisal standards and methodologies” and are not “based in fact.

“The adjustment is applied to each of the comparable vehicles on top of adjustments for differences such as mileage, options and equipment,” the lawsuit stated.

Little explanation is given for the projected sold adjustment, Driggins said in the lawsuit, apart from a statement from Progressive that says the value reduction is there to “reflect consumer purchasing behavior.”

Driggins also maintained that Progressive promised its customers to reimburse them for the cash value of their vehicle if it has been determined to be a total loss, and that it has an obligation to do so. But the insurer failed to meet this obligation, the complaint said, by using valuation reports produced through projected sold adjustments which undervalue the vehicles, allowing the insurer to pay policyholders less.

The lawsuit also raised concerns about the insurance claim dispute process of Progressive. The complaint noted that in the event of a disagreement over the value of the totaled vehicle, both parties must hire an independent appraiser out of their own pockets. This, Driggins said, often costs more than the disparity.

“The policy is an unconscionable contract that was unilaterally drafted by [the] defendant with full knowledge of the unfair scheme it intended to employ to artificially reduce the value of its insured’s vehicles,” said the lawsuit.

Driggins has accused Progressive of unjust enrichment, breach of contract and breach of covenant of good faith or fair dealing. She is seeking injunctive relief, on top of compensatory, statutory and punitive damages for herself and all class members.

Driggins’ lawsuit was filed in the US District Court for the Eastern District of Pennsylvania. TopClassActions.com also reported that Driggins wants to represent a Pennsylvania class of Progressive customers who received compensation for their totaled vehicles based on a Mitchell valuation report.

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This is not the first time an insurer has been sued over purportedly undervaluing wrecked vehicles. In February, a similar lawsuit was filed against Liberty Mutual Insurance and its valuation contractor CCC Intelligent Solutions. The complaint argued that Liberty’s insurance policy required payment of the “actual cash value” of a totaled vehicle, but CCC Intelligent Solutions assigns valuation to vehicles based on their prices in private transactions instead of dealership prices.