Progressive Michigan Insurance Co and Progressive Marathon Insurance Co have agreed to pay $61 million to settle a class-action lawsuit alleging the companies failed to include certain fees in total-loss automobile insurance claim payments.
The lawsuit claims the carriers did not account for sales tax, certificate of title fees, and vehicle registration transfer fees when paying out claims for vehicles deemed total losses.
According to the settlement administrator, the class includes Michigan residents who filed first-party claims with Progressive Marathon for physical damage or theft resulting in a total loss between July 18, 2013, and July 22, 2024.
Similarly, Michigan policyholders with Progressive Michigan who filed comparable claims between July 18, 2016, and July 22, 2024, are also part of the class, according to a report from AM Best.
The settlement terms specify that class members will receive 45% of any unpaid sales tax or fees, contingent on attorney fees remaining within the $12.5 million to $15 million range. If the court-approved attorney fees are below $12.5 million, the settlement amounts for class members will be adjusted upward.
Progressive has denied any wrongdoing, stating that it has adhered to the terms of its Michigan auto insurance policies. The company also retains the right to audit claims submitted under the settlement for accuracy.
In addition to the Michigan settlement, Progressive is facing a separate class-action lawsuit in Massachusetts. That case alleges the insurer failed to provide drivers with the option to purchase collision coverage.
These justifiable refusals are largely limited to cases involving individuals convicted of insurance fraud, theft, and certain driving violations, as well as vehicles with salvage titles or high-theft risk vehicles lacking sufficient anti-theft protections.
According to the complaint, none of these exceptions apply to members of the proposed class, which could include hundreds of drivers.
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