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Progressive Insurance Defends Killer Rather Than Pay Insured’s Claim

Matt Fisher‘s post “My Sister Paid Progressive Insurance to Defend Her Killer In Court” is going viral. For good reason:

On June 19, 2010, my sister was driving in Baltimore when her car was struck by another car and she was killed. The other driver had run a red light and hit my sister as she crossed the intersection on the green light.

Now, I don’t discount the possibility that Katie was at fault in the accident, but it never really looked that way. The only witness who gave a statement on the day said that Katie had the light, etc. The totality of the evidence left some room for argument, but that will be the case any time there’s a catastrophic car accident that doesn’t happen underneath an array of video cameras.

One indication that the case was pretty open-and-shut was that the other guy’s insurance company looked at the situation and settled with my sister’s estate basically immediately. Now, because the other driver was underinsured, that payment didn’t amount to much, but my sister carried a policy with Progressive against the possibility of an accident with an underinsured driver. So Progressive was now on the hook for the difference between the other guy’s insurance and the value of Katie’s policy.

At which point we learned the first surprising thing about Progressive: Carrying Progressive insurance and getting into an accident does not entitle you to the value of your insurance policy. It just pisses off Progressive’s lawyers. Here I address you, Prospective Progressive Insurance Customer: someday when you have your accident, I promise that there will be enough wiggle room for Progressive’s bottomless stack of in-house attorneys to make a court case out of it and to hammer at that court case until you or your surviving loved ones run out of money.

Which is what Progressive decided to do to my family. In hopes that a jury would hang or decide that the accident was her fault, they refused to pay the policy to my sister’s estate.

Out of a sense of honor, and out of a sense of the cost of my sister’s outstanding student loans, my folks opted to try to go after the money through legal channels. At which point they learned another delightful thing. In Maryland, you may not sue an insurance company when they refuse to fork over your money. Instead, what they had to do was sue the guy who killed my sister, establish his negligence in court, and then leverage that decision to force Progressive to pay the policy.

Now my parents don’t harbor much venom for the guy who killed my sister. It was an accident, and kicking that guy around won’t bring Katie back. But kicking that guy around was the only way to get Progressive to pay. So they filed a civil suit against the other driver in hopes that, rather than going to court, Progressive would settle. Progressive did not. Progressive made a series of offers (never higher than 1/3 the amount they owe) and then let it go to a trial.

At the trial, the guy who killed my sister was defended by Progressive’s legal team.

If you are insured by Progressive, and they owe you money, they will defend your killer in court in order to not pay you your policy.

Thus far, Progressive has not issued any public explanation beyond, “We fully investigated this claim … and feel we properly handled the claim within our contractual obligations.”

UPDATE:  Upon further review, it appears Progressive acted reasonably in this case. See “Progressive Meme Gets Halfway Around the World Before The Truth Gets its Pants On.”

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. unsurprising says:

    Typical disgusting progressives.

    Hot debate. What do you think? Thumb up 7 Thumb down 21

  2. stonetools says:

    Hey, that’s a victory for the job-creating insurance companies. What’s needed is more tort reform to protect the job creators from those pesky claimants .

    Prior to the passage, of the ACA, health insurance companies pulled the exact same dodges as Progressive. Republicans were and are fine with that.

    Hot debate. What do you think? Thumb up 18 Thumb down 4

  3. al-Ameda says:

    Private Insurance companies really are America’s ‘Death Panels.’

    Highly-rated. Helpful or Unhelpful: Thumb up 22 Thumb down 3

  4. Not to excuse Progressive here, but if you go to a cut rate insurance company, you shouldn’t be suprised that it’s hard to get money out of them. There’s a reason they were able to undercut everyone else.

    Like or Dislike: Thumb up 8 Thumb down 2

  5. Dean says:

    Why does everything become a Republican-Democrat/Conservative-Liberal issue on here? Sometimes party and political beliefs are irrelevant and here is an example of where they are irrelevant.

    Like or Dislike: Thumb up 15 Thumb down 1

  6. Al says:

    My wife sells auto insurance and has always said that Progressive sucks. Their whole “have someone drive to the accident scene writing you a check” thing is purely a way to low ball the payouts on claims.

    Like or Dislike: Thumb up 7 Thumb down 0

  7. Jenos Idanian #13 says:

    Someone needs to do a cartoon of Flo as the Wicked Witch of the West or something. Or maybe a “SAY NO TO FLO” or “FLO BLOWS” sticker.

    That’s the downside of having such a recognizable spokesperson/mascot: they become the instantly-recognizable symbol when someone’s mad at you.

    Like or Dislike: Thumb up 5 Thumb down 0

  8. mattb says:

    @Dean:

    Why does everything become a Republican-Democrat/Conservative-Liberal issue on here? Sometimes party and political beliefs are irrelevant and here is an example of where they are irrelevant.

    They are relevant to the degree that one party puts forward a notion that private insurance is the best way of dealing with medical expenses. And members of that same party then use very charged rhetoric like “death panels” to describe the way in which the government will avoid paying for treatment.

    A story like this reminds us that Private Insurers are — as part of being in the business of maximizing shareholder profit — more concerned with cost control than meeting contractual obligations. And that when faced with a large payout, they suddenly appear to operate far more like the “government death panels” that were warned of in the summer of 2010.

    Like or Dislike: Thumb up 10 Thumb down 5

  9. This is what typically happens in cases involving underinsured or uninsured motorists when the policy holder, or their representatives in this case, are unable to settle with the insurance company. Without knowing the facts of the case, I can’t say that there’s anything at all unusual about it.

    Fisher is incorrect about one thing. The underinsured motorist coverage does not mean that Progressive is liable for the difference between whatever the other guys insurance company paid and “the value” of his sister’s policy. It means they are liable for the difference between what the other insurance company paid and the actual damages suffered in the accident.

    Like or Dislike: Thumb up 4 Thumb down 0

  10. neil says:

    The best thing about that rant is it gave a fair and honest accounting of Progressive’s motivations for doing what it did. And it explains why Progressive doesn’t want to talk about it; they would basically only be reiterating the damning criticism of them. “This is our official policy, to maximize profits we only pay claims when it’s absolutely necessary, which means that sometimes we spend money to avoid paying claims, and every other insurance company does the same thing. I’m Flo!”

    Like or Dislike: Thumb up 3 Thumb down 0

  11. John Thacker says:

    A story like this reminds us that Private Insurers are — as part of being in the business of maximizing shareholder profit — more concerned with cost control than meeting contractual obligations.

    You are ignoring the case of mutual insurance companies, which are an option and don’t have shareholders. The largest ones are mutual. Still, even mutual insurance companies might do this, since the rest of the policyholders might somehow prefer paying lower rates to paying out your claim if they didn’t think it was particularly worthy.

    Though if you think that mutuals would do that, you’d have to think that taxpayers would do the same thing in a government-run system.

    In the case of Progressive Insurance, it’s not just a name. The founder and chairman of Progressive really does contribute millions to the Democratic Party, Moveon.org, and other organizations. He also, like the Koch brothers, contributes towards marijuana policy reform. But, just like with Chick-Fil-A, I don’t think mixing politics with this topic makes sense either.

    Like or Dislike: Thumb up 3 Thumb down 0

  12. John Thacker says:

    After all, I can certainly find examples of the government doing pretty awful things that private employers wouldn’t do. Like falsely arresting this guy for being a ‘deserter’ because of a bureaucratic mistake, and then refusing to even pay him for the hours he worked on KP, much less for his time and trouble, even though it was the Marines that made the mistake. The government acted just as Progressive Insurance did.
    Don’t like the fact that he couldn’t sue Progressive in Maryland? Say hello to the concept of sovereign immunity. The government doesn’t have to let you sue it for negligence in most cases, and they’re not letting this guy sue.

    Like or Dislike: Thumb up 2 Thumb down 0

  13. MstrB says:

    James-

    Consumerist had a follow up post to this that discussed some clarifications to the issues regarding why this may have happened.

    Like or Dislike: Thumb up 2 Thumb down 0

  14. sam says:

    Whatever the justification/lack of justification, Progressive is getting hammered on Flo’s Facebook page. I gather similar stuff in happening on Twitter. Sounds like a PR nightmare for the company to this point.

    Like or Dislike: Thumb up 0 Thumb down 0

  15. This blog post is also enlightening:

    Yes, “[c]arrying Progressive insurance and getting into an accident does not entitle you to the value of your insurance policy.” But that’s true for all insurance companies when the policy holder is not in a no-fault state. Progressive isn’t unique in that regard.

    As of 2007, Maryland permits recovery on a “bad faith” theory against insurers who refuse to pay claims where liability is not “fairly debatable.” One would expect that Progressive would not have taken the action it did, and risk liability, if their position was not “fairly debatable.” (See the entertaining story of Rex DeGeorge for examples of insurance companies being quick to pay when bad faith might be at issue.) The author seems to concede that Progressive’s position was fairly debatable; he also makes no mention about further litigation against Progressive for its initial refusal to pay.

    One sympathizes with the author for the tragic loss of his sister. But his fury at Progressive is misguided. Katie, and other Maryland drivers, pay as little for auto insurance as they do precisely because insurance companies don’t have to immediately pony up when they are not liable. One could ask for different rules, but consumers would be paying for those different rules up front.

    Like or Dislike: Thumb up 1 Thumb down 1

  16. @sam:

    That’s because most people don’t understand the law and act based on pure, raw emotion, which usually causes them to get things wrong

    Like or Dislike: Thumb up 3 Thumb down 0

  17. Another interesting bit: Maryland (along with Alabama, North Carolina, Virginia, and Washington, D.C.) still uses a contributory negligence standard (if you are 10% responsible for an accident, you cannot recover damages) as opposed to the comparative negligence standard (if you are 10% responsible for an accident, you can recover 90% of your damages) in most states.

    Given that it’s hard to prove you were entirely blameless in most car accidents, it’s easy to see why the defendant would be more likely to refuse to settle in Maryland.

    Like or Dislike: Thumb up 1 Thumb down 1

  18. PD Shaw says:

    @Stormy Dragon: “you go to a cut rate insurance company, you shouldn’t be suprised”

    That was my initial thought. My wife and I have been in some accidents in the last few years (none our fault), and the disparity between good and bad insurers is revealing.

    Like or Dislike: Thumb up 1 Thumb down 0

  19. Tsar Nicholas says:

    Naive and ignorant blog post and even more of a naive and ignorant underlying article, the latter of which is excusable since obviously raw emotions are the driving force.

    The interplay between UM coverage, third-party coverage, third-party liability, UM claims, third-party claims, bad faith, etc., for decades have been in place and are the subject literally of thousands upon thousands of reported appellate decisions across the country. Without knowing the real facts of this case it’s impossible to opine on whether or not Progressive is in the wrong.

    Like or Dislike: Thumb up 1 Thumb down 2

  20. OzarkHillbilly says:

    I was hit by a guy who had no insurance. When I filed my claim with State Farm under the “Uninsured” coverage part of my policy, They denied, so yeah, I sued. I ended up getting what I had coming, medical expenses, a weeks lost wages, and the money I had forked out for my truck. My Lawyer got the same. Probably their lawyer did too.

    Fact is, they do this figuring most people will just go away, or give up after a token battle. And most people do.

    Like or Dislike: Thumb up 2 Thumb down 0

  21. cthomson says:

    Major condolences to the guy for losing his sister, but this post reeks of not telling the whole story.

    I suspect the sister is more at fault than the post leads us to believe. As an attorney, a client’s case never sounds as good as it does the first time he presents it to you. The author even expressed a lack of confidence as to his sister not being at fault. Moreover, if the sister was clearly not at fault, the sister’s estate could have filed a declaratory judgment (DJ) action asking the court to declare that Progressive owed on the claim.

    Instead of filing a DJ, the siter’s estate’s attorney likely thought he would have better luck if he sued the driver. Who would provide a better defense? This other negligent driver who has to assume his own defense expenses, or Progressive who will hire firms like mine that are comprised of top level law students? Smart move, plaintiff’s attorney, but it looks like your hope that Progressive would not intervene did not pan out.

    And why wouldn’t Progressive intervene? The plaintiff was essentially trying to get Progressive to fork over money it perhaps did not contract for by blind-siding them and suing the driver.

    If the sister’s estate wants money for accidents where the sister was at fault, the sister would have had to have bought a different type of insurance policy. Otherwise, the premiums we all pay for underinsured motorist coverage would be significantly higher.

    Like or Dislike: Thumb up 1 Thumb down 1

  22. PD Shaw says:

    @OzarkHillbilly: Congrats, sounds like a winner for everybody, you, your lawyers and their lawyers.

    I think insurance companies tend to see lawsuits as acturarial risks and they adopt policies and practices that over time and over many lawsuits make sense. Everybody else in a lawsuit is usually making decisions just on the present case.

    Like or Dislike: Thumb up 0 Thumb down 0

  23. @PD Shaw:

    Another tip: even if the other driver is at fault, file the claim through your insurance and let them subrogate it to the other driver. Since you’re not their customer, the other insurance company has absolutely no incentive to keep you happy from a consumer standpoint.

    Like or Dislike: Thumb up 0 Thumb down 0

  24. grumpy realist says:

    Except that from a PR point, this really hammers Progressive.

    (Have to reveal I used Progressive when I first started driving/owning a car. They were the only ones who would insure me. Based on this episode, am lucky I never got into an accident!)

    Like or Dislike: Thumb up 0 Thumb down 0

  25. sam says:

    @Doug Mataconis:

    That’s because most people don’t understand the law and act based on pure, raw emotion, which usually causes them to get things wrong.

    Too true. Here’s Progressive’s lastest statment:

    I’d like to take this opportunity to explain Progressive’s role in this complex case. First and foremost, our deepest sympathies go out to Kaitlynn Fisher’s family.

    To be very clear, Progressive did not serve as the attorney for the defendant in this case. He was defended by his insurance company, Nationwide.

    There was a question as to who was at fault, and a jury decided in the Fisher family’s favor just last week. We respect the verdict and now can continue to work with the Fisher family to reach a resolution.

    Chris Wolf
    Claims General Manager
    Progressive

    Perhaps even lawyers jump the gun:

    @cthomson:

    Instead of filing a DJ, the siter’s estate’s attorney likely thought he would have better luck if he sued the driver. Who would provide a better defense? This other negligent driver who has to assume his own defense expenses, or Progressive who will hire firms like mine that are comprised of top level law students? Smart move, plaintiff’s attorney, but it looks like your hope that Progressive would not intervene did not pan out.

    And why wouldn’t Progressive intervene? The plaintiff was essentially trying to get Progressive to fork over money it perhaps did not contract for by blind-siding them and suing the driver.

    The takeaway, for me, is the power of social media today, for good or ill. Companies are going to have to become much more sophisticated in their approaches to this new media reality, I think. Facebook et al. are simply not vehicles for company feelgood pieces.

    Finally, I read here that the verdict in favor of the plaintiff involved a $760,000 settlement.

    Like or Dislike: Thumb up 0 Thumb down 0

  26. sam says:

    Doug could you spring my comment for the spaminator? TIA.

    Like or Dislike: Thumb up 0 Thumb down 0

  27. sam says:

    Hmmm. Maybe my plea should be directed to James.

    Like or Dislike: Thumb up 0 Thumb down 0

  28. wr says:

    @John Thacker: So the fact that this insurance company screws its policy holders is proof that government sucks. Well played, sir.

    Like or Dislike: Thumb up 0 Thumb down 0

  29. wr says:

    @Stormy Dragon: “Given that it’s hard to prove you were entirely blameless in most car accidents, it’s easy to see why the defendant would be more likely to refuse to settle in Maryland. ”

    Exactly, And this is why the Republican mantra of “let insurers sell policies across state lines” is such a sick lie. Within weeks, every single insurance company will settle in whichever state passes the most generous laws exempting them from all regulation.

    My bet is they’ll be in Maryland, where all the credit card companies went for the same reason.

    Like or Dislike: Thumb up 3 Thumb down 2

  30. wr says:

    @Tsar Nicholas: “Without knowing the real facts of this case it’s impossible to opine on whether or not Progressive is in the wrong.”

    You know, if you don’t have anything to say, you don’t actually need to keep posting.

    Like or Dislike: Thumb up 2 Thumb down 0

  31. Ebenezer_Arvigenius says:

    Will Wheaton took it up and it’s gone viral. Progressive is ‘fighting back’ by using twitter spambots *headdesk*.

    They couldn’t have gotten worse publicity if they tried. I’m really at a loss that progressive didn’t apologize profoundly and buried the whole thing as deep as possible as fast as possible. There’s at least one form of malpractice going on here.

    Like or Dislike: Thumb up 0 Thumb down 0

  32. PD Shaw says:

    Progressive has issued a statement, denying that they served as attorney for the defendant. Link.

    Like or Dislike: Thumb up 0 Thumb down 0

  33. bill says:

    i dumped progressive when i realized their founder was actually a “progressive”! money’s still money to them though, and that’s what it’s all about.

    Like or Dislike: Thumb up 1 Thumb down 0

  34. SKI says:

    @PD Shaw: And the brother responded indicating that the lawyer, which he mentions by name, stated in Court that they were there on behalf of Progressive.

    @wr: I am pretty sure the credit card companies went to North Dakota, not Maryland.

    @cthomson: Can’t go that legal route in Maryland. Needed to establish damages through suing the other driver first. Not an attempt to blind-side.

    Like or Dislike: Thumb up 0 Thumb down 0

  35. @wr:

    And this is why the Republican mantra of “let insurers sell policies across state lines” is such a sick lie.

    Auto insurance already is sold across state lines.

    Within weeks, every single insurance company will settle in whichever state passes the most generous laws exempting them from all regulation.

    I’m not a lawyer, but even if your insurance company was based in Maryland, I don’t think they could require a case to be tried there based on an accident that occured in some other state, particularly when in a case like this where they are not one of the primary parties to the lawsuit.

    Like or Dislike: Thumb up 1 Thumb down 0

  36. Allison says:

    @wr:

    This is a clown arguement. I am not a lawyer, but I believe the jurisdiction of a case is determined by where the accident occurs, not where the insurance company is based. So your argument that letting insurance companies sell across state lines (which was for health insurance, not auto insurance, by the way) will cause them to base themselves in contributory negligence states is ridiculous since they cannot choose the state where they settle a case.

    Like or Dislike: Thumb up 0 Thumb down 0

  37. Rex says:

    @mattb: You can always find a political connection if you’re bent on making political connections. How about just treating some for what they are. This is just about a lousy insurance company. I’ve never been displeased with my insurance company in 36 years (regardless of which party was in office).

    Like or Dislike: Thumb up 0 Thumb down 0

  38. Rex says:

    @Doug Mataconis: actual damages! In this case: DEATH. My guess is Fisher’s parents were seeking the extent of those damages under law and Progressive wasn’t going to let that happen.

    Like or Dislike: Thumb up 0 Thumb down 0

  39. daniellreed44 says:

    Flo’s a Ho!

    Like or Dislike: Thumb up 0 Thumb down 0