Four subsidiaries of Progressive Corp. have agreed to a nearly $14 million class action settlement to resolve allegations that they underpaid New York policyholders on total loss vehicle claims. The dispute centered on Progressive’s use of a “Projected Sold Adjustment” (PSA), a valuation method plaintiffs claimed unfairly reduced payouts.
The class action, originally filed in 2021, accused the insurer of applying PSA to decrease the base value of comparable vehicles, which were then used to determine the actual cash value (ACV) of totaled vehicles. Plaintiffs argued that the adjustment was vague, misleading, and inconsistent with industry standards. According to the complaint, PSA was applied in addition to standard valuation deductions—such as mileage, condition, and vehicle options—resulting in lower claim payments.
Progressive defended its approach by pointing out that the Mitchell software it uses, including the PSA methodology, had been approved by the New York Superintendent of Insurance. The company also noted that no plaintiffs alleged any misconduct outside of the vehicle valuation process.
While the settlement does not include an admission of wrongdoing, it allocates $13.5 million in attorney fees, approximately $343,000 for litigation costs, and $3,000 each to the seven named plaintiffs, along with reimbursement for any documented lost wages or out-of-pocket expenses.
The case highlights growing scrutiny over valuation methods used by insurers, especially in total loss scenarios where consumers may face discrepancies between expected and actual payouts.
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