A Massachusetts woman has filed a class action lawsuit against Progressive Direct Insurance Co. over the alleged denial of collision and comprehensive auto insurance coverage.

The complaint was filed Nov. 4 in Suffolk County Superior Court. It alleges unfair and deceptive business practices.

Under state law, there are only six situations in which insurers can refuse collision coverage:

Although Danielle Gondola and her vehicles failed to meet any of the stipulations she was denied first-party physical damage (collision and comprehensive).

Progressive maintained that it refused to offer collision coverage due to a “binding restriction,” according to the complaint.

“However, Progressive never articulated the lawful basis for this ‘binding restriction’ and how it could, as a matter of law, supersede statutory authority to the contrary and deprive a Massachusetts consumer of the statutory protections mandated by the legislature,” the complaint states.

Three weeks after buying her auto insurance policy from Progressive, Gondola was involved in a three-vehicle collision that totaled her vehicle. Progressive denied the claim.

“Progressive has implemented a systemic, pre-determined refusal to offer optional automobile insurance coverages due to a so-called ‘binding restriction’ that runs counter to established Massachusetts law that limits the circumstances under which an insurer can refuse to offer optional coverages,” the complaint states. “This has caused Massachusetts insured drivers to involuntarily forego desired coverages.”

It added that Progressive also misrepresented to its customers that it has no duty to offer optional coverages.

In June and July, Gondola served Progressive with demand letters for herself and on behalf of a putative class. According to the complaint, Progressive has “failed to respond with a reasonable offer of settlement” so the class action lawsuit was filed. The class includes all Massachusetts Progressive Direct Insurance Co. customers who weren’t given the chance to purchase optional insurance coverage due to a binding restriction from Nov. 4 2020 to the date of the complaint filing, Nov. 4, 2024.

As of Friday, Progressive hadn’t filed any documents in Suffolk Superior Court related to the case.

A jury trial is demanded and relief includes actual, statutory, and treble damages but a dollar amount isn’t specified.

Despite incurring $563 million of catastrophic losses related to Hurricane Helene hitting the Southeast earlier this fall, Progressive reports that its Q3 profit doubled, according to a September earnings report released Oct. 15.

Progressive’s net income increased to $2.33 billion ($3.97 per share) from the $1.12 billion ($1.89 per share) reported in Q3 2023.

Insurance Business magazine reports that Progressive reported an increase of nearly 1.6 million in-force policies and record spending on advertising in Q3 2024. And in 2023, Progressive was among the top five auto insurers in Massachusetts, holding a 7.93% share of direct premiums written, according to Insurance Business.

In March 2023, a federal judge partially dismissed a Massachusetts class action lawsuit against Progressive that alleged undervaluation of total loss vehicles.

Plaintiff Hayley Martorana alleged in the 2022 suit that Progressive Direct, through Mitchell International, uses valuation reports to determine actual cash value of total loss vehicles and “systemically thumbs the scale” when reaching its values by applying “‘Projected Sold Adjustments’ [PSAs] that are: (a) deceptive and unexplained; (b) contrary to appraisal standards and methodologies; (c) not based in fact, as they are contrary to the used car industry’s market pricing and inventory management practices; (d) not applied by the major competitor [CCC Intelligent Solutions] of Defendant’s vendor Mitchell; and (e) on information and belief, not applied by Defendant and Mitchell to insureds in other states like California and Washington.”

The judge dismissed allegations that the state’s Consumer Protection Act was violated and a dispute between the parties on the plaintiffs’ coverage rights as policyholders wasn’t settled.

The parties agreed to dismiss the remaining allegations in the suit in February of this year.

Earlier this year, Progressive settled a similar case filed in New York for $48 million.

The plaintiffs alleged Progressive breached the provision of their insurance contract that states actual cash value (ACV) “is determined by the market value, age, and condition” of a vehicle at the time of loss by applying Projected Sold Adjustments (PSA).

The suit claims Progressive “systemically thumbs the scale” against claimants by applying PSAs that reduce the base values of comparable vehicles that are used to calculate the ACV of claimants’ total loss vehicles.

Images

Featured image credit: AndreyPopov/iStock