Knowledge Base

Insurers on Trial: The Total Loss Valuation Lawsuits Every Policyholder Needs to Know (2025-2026)

Bottom Line: Federal courts have confirmed that the automated software adjustments insurers use to reduce total loss payouts lack a valid factual basis. Multiple class actions have settled for tens of millions of dollars. The path forward for most policyholders is now individual action, not a class lawsuit.

Federal courts in 2025 and 2026 reviewed how insurers calculate total loss payouts and found serious problems. The automated adjustments that reduce your vehicle's actual cash value (ACV) have been challenged in court, settled for tens of millions of dollars, and are now the subject of a criminal investigation by a state district attorney. If you have received a total loss offer that felt low, there is now substantial legal precedent supporting your instinct. This guide explains each major total loss insurance lawsuit from 2025 to 2026 and tells you exactly what it means for your claim.

Table of Contents

• What Is a Typical Negotiation Adjustment?
• What Is a Projected Sold Adjustment?
• The California DA Suit: When the Software Itself Is the Target
• What the 6th Circuit Ruling Means for Your Claim
• What to Do With Your Total Loss Claim Right Now
• Frequently Asked Questions

What Is a Typical Negotiation Adjustment?

When State Farm calculates your vehicle's ACV, it uses CCC One software that often applies a deduction called a Typical Negotiation Adjustment (TNA). The TNA reduces the listed price of comparable vehicles in your valuation report on the premise that buyers generally negotiate prices down before finalizing a purchase.

The legal problem with the TNA is straightforward. The adjustment applies a blanket percentage reduction to every comparable vehicle in your report, with no specific evidence that any of those vehicles actually sold below their listed price. A federal court found this approach arbitrary. The insurer cannot point to actual negotiated transaction data for the specific vehicles used in your report. It applies a general assumption across the board and reduces your payout accordingly.

The Chadwick v. State Farm Settlement

The landmark TNA case is Chadwick v. State Farm Mutual Automobile Insurance Co. (E.D. Ark., Case No. 4:21-cv-01161). A federal jury sided with policyholders in June 2025. State Farm reached a preliminary settlement of $15.6 million, with court approval granted in March 2026. Coverage of the preliminary approval and settlement terms is available at Autobody News.

If you had a State Farm total loss claim in Arkansas that included a TNA adjustment, you may be eligible for a payment from this settlement. The claim deadline is August 19, 2026. Visit the settlement administrator's website to verify your eligibility before that date.

If your State Farm claim was in a different state, this settlement does not cover you directly. However, the jury verdict and settlement carry legal weight. Citing the Chadwick case in a dispute letter puts your insurer on notice that a federal jury has already found TNA adjustments to be arbitrary. That context changes the negotiation.

To understand the full range of options available when disputing a State Farm valuation, read the State Farm total loss fight-back guide, which covers the CCC One report structure, how to challenge comparable vehicles, and how to invoke the appraisal clause.

What Is a Projected Sold Adjustment?

Progressive uses Mitchell International's valuation software, which applies a deduction called a Projected Sold Adjustment (PSA). The PSA reduces the listed price of comparable vehicles by projecting what they would eventually sell for, based on the assumption that listed prices are higher than final transaction prices.

Like the TNA, the PSA has been challenged in court as a method of systematic undervaluation. The adjustment reduces your payout not based on what your vehicle or comparable vehicles actually sold for, but on a projected estimate with no individualized factual basis for each specific vehicle in your report.

The Volino and Brown Settlements

Two major settlements resolved PSA class actions in 2025 and 2026.

Volino v. Progressive Insurance (S.D.N.Y.) produced a $48 million settlement covering New York policyholders whose total loss settlement offers included a PSA deduction. If you had a Progressive claim in New York, visit nytotallossclaim.com to check your eligibility.

Brown v. Progressive (N.D. Ga.) produced a $43 million settlement covering Georgia policyholders affected by the same adjustment. Visit gatotallossclaim.com for eligibility details.

Together, these two settlements total $91 million paid by one carrier over PSA deductions in just two states. Repairer Driven News has covered both Progressive class actions and the PSA adjustment at the centre of each case.

In Illinois, a similar case (Holmes v. Progressive Universal Insurance Co., N.D. Ill.) was denied class certification on April 15, 2026. The case is continuing on an individual basis. Illinois policyholders who received a PSA reduction can still pursue individual claims, even though the class action path closed.

If you are dealing with a Progressive total loss offer that includes a PSA or any similar adjustment, the Progressive total loss fight-back guide explains the PSA in detail and walks through how to dispute it step by step.

The California DA Suit: When the Software Itself Is the Target

The most far-reaching total loss case of this period involves not just an insurer applying unjustified adjustments, but the companies that built and sold the valuation software itself.

The Alameda County District Attorney filed People of the State of California v. USAA, Progressive, CCC Intelligent Solutions, and Mitchell International in state court. This case alleges that insurance carriers and the software vendors they use conspired to create customized versions of CCC and Mitchell software that systematically misrepresent ACV. The complaint alleges these customizations were not neutral tools for calculating market value. They were configured to produce lower numbers.

The case seeks civil penalties against all named defendants and consumer restitution for California policyholders affected by the customized software outputs. As of the date of this article, the case is pending. Repairer Driven News has ongoing coverage of this total loss insurance lawsuit and the California DA's investigation.

What this case means for policyholders beyond California is the underlying allegation. If a district attorney is arguing that the valuation reports insurers hand you were configured by the software vendor to produce low outputs, that fundamentally challenges the framing that these reports are independent or objective third-party analyses. The majority of insurers in the United States use either CCC or Mitchell software to generate your valuation report. Both are named defendants in this case.

If you want professional help evaluating a total loss valuation, find qualified appraisers and public adjusters in your area who specialize in disputing insurer software outputs.

What the 6th Circuit Ruling Means for Your Claim

On April 24, 2026, the full bench of the 6th U.S. Circuit Court of Appeals (sitting en banc, meaning all judges together rather than a standard three-judge panel) issued a ruling that blocked approximately 90,000 Tennessee policyholders from pursuing a class action against State Farm over ACV disputes. The decision was 10 to 7.

This ruling joins five other federal circuit courts of appeal that have reached similar conclusions. Across a growing number of federal circuits, class certification in ACV disputes is being denied. The legal bar for grouping policyholders into a class and litigating collectively is proving very high in this category of case.

The practical consequence is straightforward. You are very unlikely to be included in a future class action that resolves your total loss dispute. Even if a class action is filed in your state, the current trend is toward dismissal before any settlement is reached.

This does not mean your options have closed. It means your options are individual rather than collective. The appraisal clause in your policy, a complaint to your state's Department of Insurance, an independent vehicle valuation, and a formal dispute letter are all available to you regardless of what happens with class litigation. The class action rulings say nothing about whether individual policyholders can win their disputes. The Chadwick, Volino, and Brown settlements were all class actions that reached resolution, and their findings now stand as legal precedent you can reference.

If you have a claim with Allstate, which also uses CCC One valuations and has faced comparable challenges over its adjustment methodology, the Allstate total loss dispute guide covers the 17c formula and appraisal clause steps specific to that carrier.

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What to Do With Your Total Loss Claim Right Now

The cases above establish a consistent pattern. Insurers have applied systematic software adjustments that reduce ACV payouts, and courts have repeatedly found those adjustments legally vulnerable. You do not need to wait for a class action or be included in a settlement to benefit from this information. Here is how to use it today.

Step 1: Get an Independent Valuation

Before accepting any settlement offer, get an independent valuation of your vehicle's ACV. This gives you a documented figure produced outside the same CCC or Mitchell software that courts have found generates systematically lower numbers. When you present an independent valuation to your insurer, you are providing evidence they cannot dismiss by simply pointing to their own report.

Step 2: Review Your Report for Specific Adjustments

Request a full copy of your valuation report from your insurer if you have not already received it. Review the comparable vehicles section line by line. Look for any deduction applied to each comparable vehicle's listed price, particularly language such as "Typical Negotiation Adjustment," "Projected Sold Adjustment," or similar terms. Note the dollar amount of each deduction.

These adjustments can be challenged directly. Federal courts have found that blanket percentage adjustments applied without individualized evidence for each specific comparable vehicle lack a valid factual basis. That legal finding gives you a concrete written argument to make in your dispute.

Step 3: Write a Dispute Letter That References the Case Law

A formal dispute letter sent to your insurer carries more weight than a phone call. When that letter cites specific court findings, such as the Arkansas federal jury finding TNA adjustments arbitrary, or the $91 million in PSA settlements paid by one carrier, it signals that you understand the legal landscape and are prepared to escalate if the dispute is not resolved.

Insurers are aware of these cases. Showing them that you are also aware changes the dynamic of the conversation.

If you have not yet sent a dispute letter, the Farmers total loss fight-back guide covers comparable challenges to CCC-based valuations and includes the same adjustment dispute framework that applies across multiple carriers.

Step 4: File a Department of Insurance Complaint

Filing a complaint with your state Department of Insurance is free, requires no attorney, and triggers a mandatory response from your insurer. Most states require insurers to respond within a defined number of days. A complaint creates a formal record. If you later pursue the appraisal clause or consult an attorney, a documented complaint on file strengthens your position.

Frequently Asked Questions

Am I included in the State Farm Chadwick settlement?

You may be eligible if you had a State Farm total loss claim in Arkansas that included a Typical Negotiation Adjustment deduction. The claim deadline is August 19, 2026. Visit the settlement administrator's website to confirm your eligibility before that date. If your State Farm claim was outside Arkansas, this settlement does not apply to you directly, but you can still cite the case findings when disputing any TNA adjustment in your own claim.

Is CCC One software illegal?

No court has ruled CCC One illegal. However, the Alameda County DA's lawsuit directly challenges whether insurer-customized versions of CCC and Mitchell software violate California consumer protection law. That case is pending. Separately, multiple federal courts have found that specific adjustments generated through CCC output, including the TNA, are arbitrary and lack individualized factual support for each comparable vehicle in the report.

Can I still sue my insurer individually over a low total loss payout?

Yes. The class action certification rulings described in this article only affect whether policyholders can litigate as a group. Individual breach of contract and bad faith claims remain available in most states, subject to your state's applicable statute of limitations. Individual appraisal clause demands and Department of Insurance complaints are entirely unaffected by these rulings. The class action path is narrowing. Individual options remain open.

How do I find out if my settlement included a TNA or PSA adjustment?

Request your complete valuation report from your insurer. In a State Farm CCC One report, look for a line in the comparable vehicles table labeled "Typical Negotiation Adjustment" with a dollar or percentage reduction applied to each comparable vehicle. In a Progressive Mitchell report, look for "Projected Sold Adjustment." Both appear as deductions applied to each comparable vehicle's listed price before the final ACV average is calculated. The specific dollar amount of the adjustment is what you are challenging.

Conclusion

Between 2025 and 2026, federal courts and a California district attorney confirmed what policyholders have long suspected: the automated adjustments that reduce total loss payouts are not neutral calculations. State Farm paid $15.6 million in Arkansas. Progressive paid $91 million combined across New York and Georgia. The companies that build the valuation software are now defendants in a California case brought by a state prosecutor.

At the same time, the April 2026 ruling from the 6th Circuit signals that class action litigation in ACV disputes faces significant obstacles. Individual action is the primary avenue available to most policyholders today.

That means getting your own independent valuation, reviewing the specific adjustment lines in your report, documenting the legal basis for challenging them in writing, and being prepared to escalate if the insurer does not respond. The case law now provides the foundation. Your next step is to build the market evidence to support your claim.

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This article was created with the assistance of AI to provide helpful information on this topic.