Progressive Insurance has agreed to a $48 million settlement in a class action lawsuit filed in 2021. The case accused the insurance company of underpaying policyholders for totaled vehicles. Plaintiffs claimed Progressive used questionable adjustments to lower the actual cash value (ACV) of their cars, which deviated from standard industry practices. This settlement applies to New York residents who made claims between July 2015 and March 2023.

When an insurance company deems a car a total loss, it calculates its ACV. The final amount considers the car’s market value, age, and condition at the time of the accident. Insurers typically compare the damaged car to similar ones available on the market, adjusting for factors like mileage and features. 

The lawsuit alleged that Progressive unfairly reduced these values using Projected Sold Adjustments (PSAs), which supposedly reflect typical consumer negotiation behavior. In other words, the insurance company also looked at discounted prices based on arrangements made between buyers and sellers. Plaintiffs argued that these reductions were misleading and didn’t accurately reflect real market conditions.

The legal battle was reportedly quite intense, with Progressive challenging the claims at every turn. Despite this, the plaintiffs secured a significant settlement. The agreement amounts to 70% of the claimed compensatory damages and includes provisions for up to $16.7 million in administrative and legal costs. The settlement isn’t final yet but was presented as “unopposed” by Progressive on July 1.

If you think your insurance company undervalued your totaled car, you have options to contest the ACV.

Here’s what you can do:

Review the valuation report: Start by thoroughly reviewing the insurance company’s valuation report. Check for any errors or omissions regarding your car’s make, model, mileage, and condition.

Gather your own evidence: Collect evidence to support a higher valuation. This includes recent photos of your car, maintenance records, and receipts for upgrades or repairs. You can also look up the market value of similar cars in your area using online car valuation tools.

Get an independent appraisal: Hire an independent appraiser to provide a professional assessment of your car’s value. This can give you a more accurate valuation and strengthen your rebuttal.

Negotiate with your Insurer: Present your evidence and the independent appraisal to your insurance company. Clearly explain why you believe their valuation is too low. Be prepared to negotiate and make a case for a higher payout.

File a complaint: If you don’t get anywhere with your insurance company, you can file a complaint with your state’s insurance department. They can investigate your claim and potentially mediate the dispute.

Consider legal action: If all else fails, you might consider legal action. Consulting with an attorney specializing in insurance disputes can help you understand your options and the likelihood of success.