Slaying a Giant: Consumer Defeats Progressive in Short-Pay Lawsuit
Published in New Jersey Automotive – Thomas Greco Publishing
Walking into a courtroom to confront a massive corporation like Progressive Insurance on a short-pay lawsuit would intimidate many people. And Carmen Torres* acknowledges she was one of those people. She admits to being terrified when she realized that her case was actually going to trial, but armed with documentation from her collision repair shop, she walked away with justice served and a sense of empowerment from her encounter with the insurance giant.
It all began when Torres was rear-ended in her newly-leased Mazda which only had a couple hundred miles on it. She had been in a couple fender benders in the past and is a loyal customer of her chosen collision repair facility in Bergen county, and although she thought she knew what to expect from previous repairs, this accident quickly showed itself to be different than anything she had experienced in the past. Progressive’s initial estimate came in $1,500 short of the shop’s repair plan, and they refused the shop’s attempts to negotiate a more reasonable amount.
“Typically, you file a claim, the insurance company pays to fix the vehicle, and you move on, so that’s what I was expecting from this no-fault claim against the other driver’s insurer,” Torres recalls. “But they refused to pay my shop’s full bill because they insisted the shop’s hourly rate of $75 was too high.” Although the shop attempted to negotiate their rate for the customer’s benefit, they could not meet the insurer’s unreasonable demand to charge the $57 it deemed suitable for the market. “I’ve seen $57 work, and that’s not what I wanted,” insists Torres, who had received her facility’s assurances that her car would be repaired according to OEM standards using all new OEM parts and materials.
When a supplement was filed due to a color-matching issue, Progressive combated that as well, increasing the amount of the short pay by over $900. “Progressive just kept saying, ‘No, it’s too high.’ Even when they received a $1,050 bill for sublet calibrations, the adjuster offered $700 and insisted on talking to the owner of the calibration company. Despite being presented with all the supporting documentation, Progressive outright refused to pay the full amount. I couldn’t believe how much it took to restore my car to its original condition!”
Torres “made multiple calls to Progressive to try to resolve the issue – I asked them to give me a cheaper rental car to make up the difference, and the shop offered to waive four days worth of storage fees, but Progressive refused to budge, insisting those were different departments. When I escalated the matter higher in the corporate chain, they were very apologetic but continued to give me the same meaningless rhetoric; they told me to either transfer my car or pay the difference myself.”
Faced with the option of moving her brand-new car to an unfamiliar shop or paying the difference of $2,462 out of pocket, Torres called her shop for advice. They told her that she has all the rights and recommended she sue the person who hit her, suggesting that would get the insurer’s attention, though everyone suspected that Progressive would settle outside of court.
As a payroll specialist for a commercial real estate company, Torres had no experience with small claims court, nor did she have any desire to appear before a judge since she fears public speaking and describes herself as non-confrontational; however, she trusted what her shop told her. “They assured me that these big insurers usually settle out of court, so I filed the lawsuit,” she reports. “From that point out, I mentioned the small claims case to every Progressive employee I spoke with, but nothing changed, so I paid $2,462 when my car repairs were complete. I still believed that Progressive would settle and even went on vacation, expecting to find a check in my mailbox when I returned.”
That was not the case. Instead, Torres received a court date, but her shop assured her that it was unlikely the insurer would appear in court, even if they made her waste her time by showing up. Two days before her assigned court date, Torres noticed that Progressive had assigned a lawyer to the case. When she shared that information, the shop armed her with a packet of information, which included receipts for parts and materials, p-pages, training documentation and market data from LaborRateHero.com. Torres reviewed the documentation and wrote up a two-page summary as she hoped that she wouldn’t actually have to use any of it.
When Torres appeared for her day in court, her anxiety spiked as the “strict, no-nonsense” judge spent an hour and a half explaining how the day would go. First, to reduce the number of cases that would go to trial, he assigned a clerk to each case and encouraged the litigants to try to come to an agreement.
“I explained the situation to the clerk and emphasized that I didn’t feel I should have to pay nearly $2,500 out of pocket on a no-fault case. The clerk talked to Progressive’s lawyer, who offered to settle for $500. What a slap in the face! If they had offered half of what I’d paid, I would have agreed, but $500 is a joke. The clerk didn’t even ask if I wanted to accept it.
“I wasn’t prepared for a trial – this was completely out of my wheelhouse, and I didn’t even have a lawyer – but I figured I’d already come this far, so there was no point in turning back now,” Torres adds. “If nothing else, I’d cost Progressive more than $500 in lawyer fees by going on to trial.”
As Progressive’s lawyer called the plaintiff to the stand for questioning, the insurer’s adjuster showed up as a witness for Progressive, but Torres did not let his appearance unnerve her. She recounted all the points of the case to the judge and recalled a piece of advice from the shop. “If all else failed, I was instructed to ask Progressive for proof that the median labor rate in our area was $57 an hour.”
Torres handed the judge a printout from LaborRateHero.com, which demonstrated an average hourly labor rate of $72 within 10 miles of the shop’s zip code and $74 within 20 miles. “Nowhere on that report showed $57, so the judge asked the adjuster how he determined the market rate. He admitted he got that number from Progressive’s survey, but he didn’t have the data behind it and had no clue whether my shop was included in that survey. He couldn’t prove $57 was the median rate…but I had data that clearly showed it wasn’t!”
The judge essentially chided Progressive for its failure to negotiate, ordering the insurance giant to reimburse Torres for the amount she had paid out of pocket. “I gave the biggest yelp; I couldn’t believe I won,” she beams with pride. “I did it on my own – no lawyer – because I didn’t want to pay even more if I lost. If the judge didn’t see my point, it is what it is. I even refused the shop’s offer to send a technician with me because I didn’t want to waste their time. But it didn’t matter because I won. I was so excited to tell my daughter, who wants to go to law school, that her mom beat a lawyer!
“Small claims court is not for the weak of heart,” she continues. “I was so nervous, but the facts spoke for themselves; it all came down to a no-fault claim on a two-week-old car and Progressive’s inability to prove that I was in the wrong. I can’t believe they made me go through all of this just to cover my car’s repairs, but $2,500 is a lot for our family. It’s nothing to a big corporation, so it’s crazy that I escalated this matter all the way up the corporate chain, and they still wouldn’t budge.”
Torres is grateful for her shop’s support, advice and encouragement. “As soon as I left court, I bought donuts for the whole crew to thank them for all their help.”
Since Torres’ victory, the owner of the body shop that repaired her car reports that another customer’s pending Progressive short pay was settled out of court and that the facility has enjoyed more success in negotiations with the insurance carrier. “It’s all about educating your customers and enlightening them as to their rights,” he stresses. “The insurance companies don’t owe shops anything, but they do owe the consumer. When we get the vehicle owner on board to fight for their rights, they can slay giants.”
*Name changed to protect consumer’s identity
