Progressive Refused to Pay NJ Policyholders Full ‘Actual Cash Value’ of Totaled Cars, Class Action Says

New to ClassAction.org? Read our Newswire Disclaimer

Progressive Garden State Insurance Co. and affiliate Drive New Jersey Insurance Company face a proposed class action lawsuit that alleges the insurers failed to fully compensate customers for totaled cars.

According to the complaint, although both defendants offer “materially identical” policies that promise to compensate insured drivers for the actual cash value (ACV) of totaled vehicles, the companies do not cover the costs associated with transferring tags and titles. The case claims title and tag transfer fees, which together total $89.50, are a “mandatory” and “unavoidable” cost involved with replacing a totaled vehicle in New Jersey because the state requires titles and registration in order to operate any car. The suit contends that these fees are therefore required by law to be included in an insurer’s ACV payments. From the complaint:

“By law, an ACV policy indemnifies insureds such that payment for the ‘loss’ of a legally titled and registered vehicle legally operable in New Jersey necessarily includes, at minimum, an amount sufficient to legally operate a vehicle in New Jersey, just as the insureds did prior to the loss.

All else being equal, the value of a vehicle that is legally operable is higher than the value of a vehicle that is not legally operable. Mandatory title and registration transfer fees are a factor that willing buyers and sellers consider in vehicle transactions.”

With regard to the named plaintiffs, the case claims that all three drivers had insurance policies with either Progressive or Drive New Jersey when they suffered a total loss of their respective vehicles. Under the terms of their respective policies, the lawsuit contends, the plaintiffs were entitled to receive compensation from their insurer for the full ACV of their vehicles in the event of a total loss. Despite these terms, however, the defendants “breached [their] policy contracts with [the plaintiffs] by failing to pay the cost of title transfer fees and registration transfer fees due under their policies,” according to the complaint.

The lawsuit looks to represent all consumers who:

• Insured a vehicle for physical damage under a New Jersey auto insurance policy issued by Progressive Garden State;
• Made a claim under the policy for physical vehicle damage;
• Had their claim adjusted as a total-loss within the last six years; and
• Were paid on an ACV basis without receiving title or registration transfer costs.

The complaint can be read below.