Progressive in huge settlement with policyholders

Progressive in huge settlement with policyholders | Insurance Business America

Motor & Fleet

Progressive in huge settlement with policyholders

Insurer to pay but denies wrongdoing

Motor & Fleet

By
Terry Gangcuangco

Progressive Insurance has agreed to a $48 million settlement to resolve Volino et al v. Progressive Casualty Insurance Co et al, a class action lawsuit alleging that the insurer systematically undervalued claims made by New York drivers whose vehicles were totaled.

Policyholders contended that the company employed third-party software that undervalued the pre-accident sales price of their vehicles.

It was alleged that the software included adjustments that exaggerated the impact of negotiation tactics, which they argued had become outdated due to the prevalence of online pricing.

The supposed manipulation led to reduced payout amounts, which the policyholders said was in violation not only of Progressive’s own policies but also of the general business law in New York.

Reuters reported that the preliminary settlement – which applies to policyholders in New York from July 28, 2015 to the present – was filed on Monday evening in Manhattan federal court and awaits approval from US District Judge Lorna Schofield.

Although Progressive agreed to settle, the Ohio-headquarted company denied any wrongdoing. It was noted that requests for comment from the insurer and its legal representatives went unanswered on Tuesday.

The huge settlement comes on the heels of an earlier, unrelated settlement with Aric Hutchinson, whose wife was killed on their wedding day after being hit by a supposedly drunk driver named Jamie Komoroski.

The Post and Courier reported that the widower’s settlement with Progressive amounted to $75,000, while Fooly Beach clubs The Crab Shack and The Drop-In Bar & Deli are shelling out $640,000 and $320,000, respectively.