An Arizona appellate court has ruled that Progressive Preferred Insurance Company is not obligated to allow a car loan provider to dispute its valuation of a totaled vehicle through the policy’s appraisal process.
In a decision issued on March 14, 2025, the Arizona Court of Appeals reversed a lower court’s ruling in favor of Date Street Capital, LLC, a lienholder and loss payee on the policy. The court held that Date Street, while entitled to receive insurance proceeds as specified in the policy, has no contractual right to demand a third-party appraisal to contest the valuation of the loss.
The case arose after Derrick Ingram, who financed his vehicle purchase through Date Street, obtained insurance from Progressive. The policy identified Date Street as a lienholder but did not list it as an insured party. When Ingram’s vehicle was declared a total loss following an accident, Progressive valued the car at $5,316.66 and issued payment to Date Street.
Date Street, unsatisfied with the valuation, sought to invoke the policy’s appraisal clause, which provides that if “we [Progressive] and you [the insured] cannot agree on the amount of a loss, either party may demand an appraisal.”
The Maricopa County Superior Court initially sided with Date Street, reasoning that the loss payable clause implicitly allowed the lienholder to contest the valuation in order to protect its financial interest.
The appellate panel, however, disagreed. Writing for the court, Judge Gard emphasized that the policy language was clear: only the insured and insurer may invoke the appraisal clause. Date Street, not listed as an insured, lacked standing to participate.
“To interpret the appraisal clause as including Date Street would require us to write an unwritten term into the policy, which we may not do,” Judge Gard wrote.
The court also found no support in the policy’s loss payable clause to extend appraisal rights to the lienholder, concluding that the clause merely dictates how payment is allocated between insured parties and lienholders, not how disputes over valuation are resolved.
As the prevailing party, Progressive was awarded attorneys’ fees and costs on appeal. The case was remanded to the trial court for further proceedings consistent with the decision.
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