I’m glad I’m not the CEO of Progressive Insurance right now. In fact, I think I’d rather slather sugar water over my body and walk into a beehive.
The company is currently embroiled in a PR nightmare of “epic” proportions (yes, I believe epic is being used correctly in this case).
Here’s the background- A man named Matt Fisher wrote a blog post titled “My Sister Paid Progressive Insurance to Defend Her Killer In Court.” You can read his post here, so I’m just going to quote a few items taken directly from the post:
- His sister Katie was insured by Progressive.
- She was driving in Baltimore when her car was hit; she was killed.
- The other driver’s insurance company made a payment to Katie’s estate.
- Side note- No insurance company pays a liability claim unless they determine their client was, in fact, legally liable. In paying the estate, it’s pretty clear their payment indicates the other driver was liable for the bodily injury and property damage sustained as a result of the accident. Otherwise, why would you pay it?
- My assumption is that the other driver had very low limits of liability, so the maximum was paid. Once the limit is exhausted, the insurance company’s obligation is done.
- Katie carried a policy with Progressive against the possibility of an uninsured driver.
- HUGE assumption here that what Matt is referring to is uninsured/underinsured motorists bodily injury liability (UM/UIM). Because if it was only for property damage, then I can’t see this case ever getting this far. Progressive would have paid to fix the car, although in this case, I imagine the car was totaled.
- Progressive didn’t pay the UM/UIM.
- Lawsuit filed against other driver (because in Maryland you can’t sue an insurance company) to establish negligence as leverage for Progressive to pay.
- At jury trial, driver was defended by Progressive’s legal team.
What I wouldn’t give to have access to the Maryland auto policy contract and all the legal proceedings of this case. Unfortunately, that will never happen. And until Progressive starts talking in earnest (which I fear they won’t due to all the legal hoops), Matt’s post is pretty damning. And the online response has been insane- the hate and vitriol being shared right now on Progressive’s Facebook page is unlike anything I’ve ever seen.
So, since I don’t have all the information, I can’t put on my analyst’s “hat” and pick this apart. But, what I can do is ask lots of questions. Questions that need to be asked. And need answers. Will I get them? Probably not. But I’m compelled to ask anyway. I hope my insurance colleagues chime in with their thoughts. Perhaps even some lawyers. Because this whole situation is baffling and mind-boggling and quite honestly I don’t understand a lot of it.
If Katie indeed had uninsured/underinsured motorists bodily injury liability on her policy, why didn’t Progressive pay?
Were they still questioning legal liability- for example who was at fault? (you would think that payment from the other company would have established that, but I’m no attorney)
If legal liability WASN’T the issue, then why no pay? Did the policy cancel?
Did the premium check bounce? Some other administrative detail?
The accident happened over 2 years ago- if liability was determined and we know that the limits of the other driver’s policy were inadequate, why has it taken so long to settle this claim?
Who defended the administrator’s of Katie’s estate? Wasn’t it Progressive? Shouldn’t it have been?
And if each were represented by Progressive attorneys wouldn’t that be a conflict of interest?
Why on earth would Progressive’s attorneys defend the other driver?
This is baffling. Whoever insured the other driver (I think maybe Nationwide?) provides legal defense. Although if the claim was maxed out, then Nationwide would have been off the hook and not obligated to provide legal defense.
And even if they could defend the other driver, why would they? That screams “bone-headed beyond anything else.” And would certainly turn into a PR nightmare when discovered.
How this is playing out just doesn’t make sense to me. It seems like it should have been open and shut. In my 16 years in the biz, I’ve never heard of anything like this. UM/UIM claims aren’t very common, but any we’ve had have gotten settled without argument.
Anyone care to add to this story? Any new information? Insurance Peeps- surely you have something to say? This blows my mind.