Auto Insurance Claims: Calculation of AutoValuation, progressive insurance company, state insurance department

Question
Sir,

My customer bought a car from our car dealership and totaled the car within 3 months. He bought it from us for $7,000 but his Progressive Insurance company only wants to pay $3,200. They claim that we overcharged him and the car is only worth $3,200 less $500 deductible or $2,600 if the customer decides to keep the wreck.
We priced the car based on KBB value adjusted for miles and had many people call about the car. We sold it in two days. We financed 80% of the car. We offer some in-house financing to qualified buyers, but we are not a BHPH lot.

What are are choices in disputing the settlement? We really do not want to file a claim against our customer.

Thanks,

Armand

Answer
Progressive owes the actual cash value of the vehicle at the time of the loss, minus deductible.  ACV is determined by market value.  This can be subjective and differing opinions are not uncommon.

This is a pretty significant difference, so either they made some error in their calculation, or you did overcharge him.  Could he have bought a comparable vehicle for significantly less somewhere else?  If that is the case,  then there really is nothing to complain about.

Your rights under the policy are fairly limited because the customner is the insured.  You are protected in case of repossession, but that did not occur here.  So if anyone is going to complain or fight this, it needs to be the customer, as opposed to your dealership.

He could file a complaint with the state insurance department.  Or he could sue them in small claims court.