Progressive to Pay $48M to New York Drivers Over Underpaid Total Loss Claims

Progressive Insurance has agreed to a $48 million settlement with 93,000 New York policyholders who claimed they were underpaid on total loss vehicle claims.

The settlement amount is roughly 54% of the alleged compensatory damages plus pre-judgment interest. It applies to New York drivers who filed claims since July 28, 2015. After deducting attorneys’ fees and administrative costs, about $31.3 million will be distributed, averaging around $335 per policyholder.

The plaintiffs argue that Progressive used third-party software — Mitchell International, Inc.’s WorkCenter Total Loss — which improperly applies a “projected sold adjustment” (PSA) to undervalue claims, potentially affecting payouts in total loss vehicle claims. This practice may hinder market value recoveries, resulting in an average underpayment of 6.5%, breaching New York auto insurance policies and violating the state’s General Business Law.

Mitchell’s reports state the PSA adjustment reflects consumer purchasing behavior, adjusting the price to account for typical negotiations.

While agreeing to settle, Progressive denies any wrongdoing and insists it has followed all relevant insurance policies and laws, noting that the Mitchell software had state approval.

Lead plaintiffs Dominick Volino and John Plotts initiated the class action in July 2021. In March 2023, U.S. District Judge Lorna Schofield certified two litigation classes for breach of contract and General Business Law violations. Mediation began on June 11, 2024, and a proposed settlement was filed on July 1.

Plaintiff attorney Hank Bates urged the court to approve the settlement, calling it “an excellent result” for the classes. Judge Schofield has scheduled a preliminary approval hearing for August 14.