A new proposed class-action lawsuit against car insurance companies could potentially mean money in your pocket.
Gluckstein Lawyers and Wagners Law Firm have filed a proposed class action against several leading car insurance companies, alleging that they have “systemically underpaid consumers for total loss accident claims by relying on flawed valuation reports that reduce the compensation owed to policyholders.”
The suit claims these insurers have used reports from Mitchell International, Inc. and Audatex (AKA Solera) to assess the Actual Cash Value (ACVs) of vehicles that have been in accidents.
According to the plaintiffs, these reports contain “arbitrary and unlawful charges,” referred to as “Projected Sold Adjustment” and “Typical Negotiation Adjustment.” These lower the vehicle valuations and, therefore, reduce the payouts to car owners.
“This class-action lawsuit seeks to hold insurance companies accountable for practices that we believe have unfairly diminished the compensation owed to consumers in their time of need,” said Steven Rastin, co-chair of the class actions practice group at Gluckstein Lawyers.
“By relying on flawed and deceptive valuation methodologies, these insurers have created a system that profits off of undervaluing total loss vehicles, often at the expense of individuals who are already facing the burden of a significant loss.”
The lawsuit alleges that both the “Projected Sold Adjustment” and “Typical Negotiation Adjustment” are based on “outdated and inaccurate assumptions” about the used car market, where customers are assumed to always negotiate a lower price than a dealer’s listed price.
The plaintiffs say this is both arbitrary and misleading and leads to inflated profit margins for insurers at the expense of the policyholders
“Consumers trust their insurance companies to provide fair and reasonable compensation after a total loss, but we allege that these insurers are using these adjustments as a way to artificially deflate the value of the vehicles,” said Raymond F. Wagner K.C., founder of Wagners Law Firm.
“Our goal with this lawsuit is to ensure that those who have been affected by these practices are compensated fully and fairly.”
Who is eligible for this car insurance class action?
The proposed class action includes Canadian residents (excluding those in Quebec) who made car insurance claims related to total loss accidents and whose claims were subject to valuation reports that include the disputed adjustments.
These are the car insurance providers who have been named in the lawsuit:
Insurers who rely or relied on Mitchell Reports
- Aviva General Insurance Company
- Certas Direct Insurance Company
- Desjardins General Insurance Services Inc.
- Northbridge General Insurance Corporation
- Primmum Insurance Company
- The Wawanesa Mutual Insurance Company
- Security National Insurance Company
Insurers who rely or relied on Audatex reports
- Aviva General Insurance Company
- Economical Insurance
- Intact Insurance Company
- Manitoba Public Insurance
- Travelers Insurance Company of Canada
- RBC Insurance Agency Ltd.
- Axa Insurance (Canada)
- The Wawanesa Mutual Insurance Company
- Beneva Insurance Company
- The Dominion Insurance Corporation
- Royal & Sun Alliance Insurance Company of Canada
- Jevco Insurance Company
“The action seeks damages for those who were under-compensated for their total loss claims due to the improper deductions in the valuation process,” reads a news release from the law firm.
The class action has yet to be certified by the courts. You can register for, learn more about, and follow proceedings for this class action on the litigators’ website.
