Worst Car Insurance Companies Based on Class Action Lawsuits

Car Insurance Companies Class Action Lawsuits Overview: 

• Who: Class action lawsuits have recently been filed against car insurance companies such as Progressive, Geico and State Farm, among others. 
• Why: Claims against the car insurance companies include allegations of privacy violations, baseless rate adjustments and improperly reduced payouts, among other things.
• Where: Class action lawsuits have been filed against care insurance companies nationwide.

Car insurance is an expense every American driver must pay to lawfully remain on the road.

While occasionally bemoaned, having proper insurance coverage can make a significant financial difference in the event of an accident or other unforeseen event. 

Car insurance companies, however, are also a familiar target for class action complaints. 

From claims of privacy violations to improperly reduced total loss payouts and baseless rate adjustments, among other things, car insurance companies often find themselves on the defensive. 

With that in mind, Top Class Actions is taking a look at the car insurance companies, which, according to recent class action lawsuits and settlements, make them the worst. 

Progressive, State Farm, AmFam Undervalue Total Loss Claims

Progressive faced claims in October of last year that it, along with its vehicle valuer Mitchell International, had applied “baseless adjustments” to decrease the determined value of vehicles, which had been deemed a total loss. 

The consumer behind the allegation claimed Progressive and Mitchell made “arbitrary deductions” while assessing the value of the total loss vehicles. 

A separate class action lawsuit was filed against Progressive that same month that mirrored the claims that the company applied “baseless” adjustments to total loss vehicles. 

The plaintiffs argued Progressive used a method called “Projected Sold Adjustments” to reduce the vehicle’s value by applying a “assumed discount” to what the asking would be on a comparable vehicle. 

Similarly, State Farm also faced claims in October of last year that it applied “baseless” adjustments to the value of vehicles determined to be a total loss. 

The plaintiff in that case claimed State Farm intentionally applied the adjustments to save money and violated its contractual obligations to its customers by doing so.

Also in October, State Farm was accused of “systematically underpaying” drivers who receive reimbursement for total loss vehicles. 

In that case, the consumer argued State Farm violated the law and underpaid drivers by failing to include sales tax in the amount of reimbursement.

American Family Mutual Insurance, meanwhile, also faced claims in October of last year that it undervalued vehicles during total loss claims. 

Similarly, American Family is accused of directing its third-party vendor to reduce the value of a total loss vehicle by adding a “selling price reduction” to the for-sale price of comparable vehicles. 

American Family had already agreed to pay $5.7 million last April to resolve previous claims it had made improper deductions when determining the value of total loss vehicles. 

In February, meanwhile, Liberty Mutual was able to escape claims the insurer had made improper condition adjustments to reduce the amount it would need to pay on a vehicle claim. 

AmFam Accused Of Negligence, Geico With Charging ‘Excessive’ Premiums

A separate class action lawsuit was filed against American Family last June over claims the company had negligently handled the information of customers who had provided it with their drivers license information when applying for a car insurance quote.

Consumers claimed a prefill function allowed third-parties to gain unauthorized access to their drivers license information. 

Also in June 2021, Geico faced down claims that it had charged its customers excessive premiums during the pandemic. 

Consumers claimed Geico was wrong to raise premiums despite there being a “huge” drop in car accidents on account of less drivers on the road due to pandemic stay-at-home measures.

PEMCO, USAA, Progressive Agree To Settle To Resolve Claims

PEMCO Insurance Co. and PEMCO Mutual Insurance Co. agreed to pay $14.1 million last year to resolve claims it underpaid policyholders on their total loss vehicle claims. 

Consumers had accused PEMCO Insurance of applying improper “typical negotiation” deductions when determining the value of a total loss vehicle. 

USAA Car Insurance, meanwhile, agreed to a settlement in March 2021 to resolve claims it had made improper reductions to the amount due on personal injury protection claims. 

Policyholders’ claims revolved around USAA’s use of a “computerized bill review process” which the insured used to determine what the reasonable health care fees would be for related treatments in an individual geographic area. 

Going back to 2016, New Mexico Progressive Car Insurance agreed to a settlement to resolve claims the insurer used invalid selection forms for uninsured and underinsured motorist coverage. 

Was your total loss vehicle valued at a lower amount than you expected it to be? You could qualify to join a free total loss valuation lawsuit investigation. Additionally, Missouri residents who may have been subjected to erroneous adjustments by Liberty Mutual or Safeco ​​may be able to join a total loss valuation claim class action lawsuit investigation and pursue compensation.

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