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$48 Million Settlement: Progressive to Compensate Over 90,000 NY Policyholders for Undervalued Vehicles

(photo: Autoblog)

Over 90,000 Progressive auto insurance policyholders in New York are eligible to receive a $335 payment as part of a $48 million settlement after the company was accused of undervaluing their totaled vehicles to reduce payouts.

Progressive to Pay $335 to Over 90,000 Policyholders for Undervalued Vehicles

Over 90,000 New York policyholders who had their vehicles undervalued by Progressive, a major auto insurance provider, are eligible for a $335 payment as part of a $48 million settlement. The insurance company was accused of purposefully undervaluing customer’s wrecked vehicles to reduce the amount paid out to policyholders.

According to the lawsuit, Progressive’s third-party software reduced the pre-accident value of vehicles resulting in lower payouts to policyholders. The company’s actions allegedly caused financial harm to many drivers leading to job losses and even homelessness.

The suit was filed in 2015 and alleged that Progressive’s actions violated New York state law and the company’s own policies. The settlement will see all 93,000 affected drivers paid $335 in restitution with the possibility of additional payments for legal fees.

Progressive admitted to no wrongdoing in the settlement, but agreed to pay out $48 million to resolve the matter. The case is ongoing, with a preliminary hearing scheduled for August 14 to determine the final details of the settlement, according to the report of The US Sun.

READ ALSO: $37.2 Billion: Chicago’s Soaring Pension Debt Crisis: Can City Officials Find A Solution?

(photo: Insurance Journal)

Progressive Sued Over Allegations of Underpaying Customers for Totaled Vehicles

The lawsuit is not the only one filed against Progressive as a similar suit was filed in California earlier this year alleging that the company owed “duties of good faith and fair dealing” to hundreds of thousands of customers. The outcome of these lawsuits may have implications for other insurance companies and their business practices.

In related news, a district attorney from California warned that when an insurance company underpays its customers for a totaled vehicle, it can lead to job losses and even homelessness. She emphasized the importance of holding companies accountable for their actions and ensuring that they act in good faith towards their customers.

READ ALSO: Newport News City Council Approves 89% Salary Hike For Mayor And Council Members: $51,000 For Mayor, $47,000 For Council Members

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