Progressive (PGR) has reached a $48 million settlement in a class-action lawsuit involving New York drivers whose vehicles were deemed total losses. The preliminary settlement, filed in federal court in Manhattan and awaiting approval from U.S. District Judge Lorna Schofield, addresses claims that Progressive undervalued the vehicles of policyholders.
The lawsuit alleges that Progressive utilized third-party software that underestimated the actual value of the vehicles before they were declared total losses. Policyholders argued that the software adjustments inaccurately factored in haggling, which was considered irrelevant due to the availability of pricing information online. This practice resulted in artificially decreased payouts, a violation of both Progressive’s policies and New York’s general business law.
Progressive denied any wrongdoing as part of the settlement agreement. The settlement class includes New York policyholders from July 28, 2015, onward, with each member expected to receive a $335 check. Additionally, lawyers representing the policyholders may seek up to $16 million in legal fees.
The case, titled Volino et al v Progressive Casualty Insurance Co et al, is pending in the U.S. District Court for the Southern District of New York (No. 21-06243).
In conclusion, the settlement aims to provide fair compensation to New York policyholders affected by Progressive’s claims handling practices, addressing concerns raised by the lawsuit.
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