Progressive diminished value claims in Michigan

How Progressive approaches these claims

Progressive publishes no public diminished value policy, so its posture has to be read off state law, its policy structure, and regulator/court records. Two separate tracks: (1) THIRD-PARTY (you were not at fault and are claiming against Progressive as the at-fault driver's liability carrier). This is a tort claim, not a contract claim, so Progressive's obligation is set by each state's measure of damages for injury to a vehicle, not by its own policy. Matthiesen, Wickert & Lehrer's 50-state diminution-in-value survey lists many states whose courts expressly allow post-repair diminution recovery in a third-party claim, including Arizona, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, New Mexico, New York, Oregon, South Carolina and Virginia; other states cap recovery at the lesser of repair cost or market-value difference, which effectively kills DV. Progressive will generally engage on third-party DV where state law clearly supports it, but from a low anchor, and it typically resists in states with no supporting case law. (2) FIRST-PARTY (claiming DV under your own Progressive collision/comprehensive coverage). Progressive has litigated and won on this: in O'Brien v. Progressive Northern Ins. Co., 785 A.2d 281 (Del. 2001), the Delaware Supreme Court held 'repair or replace' policy language unambiguously does not require the insurer to pay post-repair diminished value. Assume no first-party DV coverage from Progressive outside Georgia. GEORGIA IS THE EXCEPTION. State Farm Mut. Auto. Ins. Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (2001) held that 'loss' in a standard Georgia auto policy includes residual diminution in value, and required State Farm to build a claims process to evaluate and pay first-party DV even when the insured never asks. Mabry bound State Farm directly, but the Georgia Insurance and Safety Fire Commissioner then extended the duty industry-wide: Directive 01-P&C-1 (Dec. 1, 2001) notified all licensed P&C carriers of Mabry and 'directed the industry to adjust diminution of value claims accordingly,' and Directive 08-P&C-2 (Dec. 1, 2008) reaffirmed that 'diminution of value shall be assessed when determining a value on first party physical damage losses' and that 'Every carrier has the obligation to evaluate the vehicle prior to loss and after the loss to determine the amount of diminution in value.' Progressive, as a Georgia-licensed carrier, is covered by those directives. Separately, Georgia third-party DV is independently recoverable in tort under Perma Ad Ideas of Am., Inc. v. Mayville, 158 Ga. App. 707 (1981). Practical read: Progressive is a negotiate-from-a-low-anchor carrier rather than a flat-refusal carrier where the law is clear, and a resistant one where it is not. It is not a reliably 'pays negotiated' carrier and it is not purely formula-only.

Why Michigan is different

No. An insurer's obligation to 'repair or replace' does not require payment for post-repair diminution in value where the policy expressly limits coverage to the lesser of actual cash value or cost of repair. Driscoll v. State Farm Mut. Auto. Ins. Co., 227 F. Supp. 2d 696 (E.D. Mich. 2002). Michigan collision policies carry that limitation.