Say It Isn’t So, Flo: Lawsuit Alleges Progressive Underpays

Written by Rebecca Barnabi, glassBYTEs.com


...cuts into the drivers’ payouts because it incorporates consumer behavior, such as negotiating a lower price,” the lawsuit states.


The adjustments by Progressive resulted in a “significant” reduction of base values on vehicles comparable to Volino’s and Plotts’, which lowered the payout of the claims.


The lawsuit alleges Volino was underpaid by $585, and Plotts’ claim could have been $800 more without the Progressive adjustment.


“Were it not for this deceptive and improper adjustment, the ‘base value’ in each valuation report would have been higher, resulting in a higher ‘settlement value’ and in turn a higher payment by Progressive for actual cash value,” the lawsuit states.


The lawsuit states, “In truth, Progressive’s Projected Sold Adjustments do not reflect market realities (the context in which 'consumer behavior' occurs) 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. A negotiated price discount would be highly atypical and therefore is not proper to include in determining actual cash value."

The plaintiffs allege inclusion of this significant downward adjustment purportedly to “reflect consumer purchasing behavior” is particularly improper in the context of this action---insureds who have suffered a total loss of their vehicle and need to procure a replacement and have limited time to search out the illusory opportunity to obtain the below-market deal Progressive assumes always exists without any explanation or support.”


The suit also alleges Progressive does not explain nor provide data to support downward adjustment to affected policyholders, including Volino and Plotts.


A disclosure on the final page of valuation reports is the only statement by Progressive on the adjustment.


Volino and Plotts seek approval of the class action suit and damages awarded to policyholders within the class, and also ask the court to order Progressive to stop using projected sold adjustment to determine actual cash value of total loss vehicles.


They also demand a trial by jury.


We thank glassBYTEs.com for reprint permission.


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