Progressive Casualty Insurance Company has been hit with a lawsuit in California alleging that the company engaged in “unlawful, unfair and deceptive” business practices when presenting policyholders with property damage offers in the event of a total loss.
What’s Going On?
When an insurance company deems a damaged car as a “total loss,” the policyholder can recover money for the reasonable value of the car just before it was crashed. Insurance companies determine this payout amount by comparing the car to other similar vehicles.
According to this new lawsuit, however, Progressive customers are getting lowballed. The suit claims the company, along with partner Mitchell International, instead tried to reduce the value of “comparable vehicles” in violation of California insurance regulations by:
Using out-of-market vehicles for comparison
Failing to fairly adjust for difference between comparable vehicles and the total loss vehicles
Using comparable vehicles that had previously been deemed total losses, without adjusting for differences in the cars
The suit claims that a company called Mitchell International, Inc. prepares these “comparable vehicle” reports and then discloses them to Progressive. As a result, Progressive should have known that the value of the vehicles was being illegally deflated, according to the suit.
The suit seeks to certify both an injunctive class and a restitution class, which both cover California residents who, within the last four years, were first party insureds who made claims to Progressive for total loss vehicles.