Did Progressive do something bad by being adverse to it's insured?

Great Debates
1

http://abcnews.go.com/US/wireStory/progressive-insurance-defense-court-case-17022186#.UC4_Mt1lRtA

Here’s a summary of the story. Young woman killed by drunk driver. The drunk only has $25k worth of insurance, obviously not enough. Young woman has $100k of underinsured coverage and makes a claim. Progressive goes to court and seemingly helps the drunk try to prove that the young woman was partially at fault. Outrage ensues.

A couple of things. One: What’s not mentioned in the article is that Maryland is a state that adheres to the old contributory negligence doctrine. If it was proven that the woman was only 1% at fault, she would be denied all recovery. Surely if the insurance company had anything to base that on, they would be doing wrong by their shareholders and other policy holders not to pursue that strategy.

Two: The attorney in the article talks about bad faith. I was under the impression that bad faith in insurance law only applied when your insurance company either refuses or does a half assed job of protecting YOU from exposure to personal liability on a claim. This didn’t happen here. It’s basically a disagreement between the woman and Progressive, so why shouldn’t they be able to assert their rights?

At first blush I was outraged at Progressive’s conduct, but as sad as this story is, it seems reasonable if they actually thought this woman might have been 1% at fault. Thoughts?

2

She paid premiums for a policy that insures her against underinsured drivers. That was the whole point of the policy. When she was hit and killed by an underinsured driver, she (or rather, her surviving beneficiaries) should have gotten what she paid for.

Is BMW “doing wrong by their shareholders” by actually giving you a car when you give them 40,000 bucks? Of course not! They’re simply giving you the product you paid for!

Except Progressive went a step further than simply denying coverage (and not providing the service paid for). They went as far as to call witnesses on behalf of her killer, and provide him legal advice! Then, after it was all over, they denied having provided that legal council! Scummy, scummy, scummy. I can’t think of any other industry besides insurance in which it’s a reasonable business decision to not give someone what they paid for.

3

What is legal is not always ethical. Progressive has been extremely unethical in its treatment of this woman’s family. So there is a badly written law that gets insurance companies off the hook sometimes for damages. It should be no surprise now to learn that government officials are crooks who serve whoever gives them money, not the people they “represent.” Progressive is a bunch of fucking scumbags for trying to weasel out on their obligation.

4

Right, but again, under Maryland law, if she is 1% at fault, neither the drunk driver or her insurance company owes her a thing. She pays premiums to recover from underinsured motorists who were 100% at fault in the accident. If she’s slightly at fault, a payout from Progressive is not what she “paid for.” Doesn’t Progressive have the right to a trial to see if she was 1% at fault?

Or because she paid premiums, then they just have to pay, period. What if the evidence showed that she was 50% at fault? 90%? When does it flip to where the insurance company can say, “We don’t know all of the facts here, so we will let a jury decide.”

5

Somewhere way, way, way past one percent. Cmon, jtgain, that law reeks of some insurance company lobbyist saying to a state legislator, “Hey, bud, write it at one percent, I’ll see that you get some nice donations to your campaign next year.” Be honest here, you know it’s true.

6

Well, the contributory negligence doctrine pre-dates auto insurance. It predates the automobile. As recently as 1960 all states had it. Today only four (plus DC) still have it: Maryland, Virginia, D.C., Alabama, North Carolina.

I could believe that Virginia, Alabama, and NC bowed to insurance companies, but blue areas like Maryland and D.C.?

But in any event, that’s the law, and if you are an attorney advising Progressive, do you pay out the untold millions in claims where insureds are 1% to X% (whatever you think is reasonable) because of some higher calling? What happens when State Farm follows the law? Progressive loses its shirt and goes out of business.

I agree that the contributory negligence doctrine is painfully harsh and too one-sided. But if you are operating within that framework, wouldn’t a lawyer be open to a malpractice suit from telling Progressive to do anything besides what they did?

7

This is what I was going to point out.

8

Trivia: Maryland, Alabama, North Carolina, Virginia, South Dakota* and Washington DC are the only places you have to deal with this “1% liability bars recovery” dragon.

  • This doctrine is not a secret, closely guarded by slimy green trolls who giggle malevolently and wring their hands in the shadowy corners of insurance office buildings, it is the law of the land in these places. Presumably if enough residents don’t like it, they can change the laws that govern them.

  • Liability insurance, also written in plain English on the policy you get in exchange for your hard-earned frogskins, pays for damages an insured would be legally obligated to pay. Un(der) Insured Motorist coverage indemnifies an insured for damages they would be legally entitled to in the event someone else causes them damage and has insufficient insurance to compensate them. Premiums for those coverages are calculated based on the risk of having to make a payment, and that risk is greatly affected by the state’s negligence rules.

With those two points in mind, she got exactly what she paid for. It’s great to demonize drunk drivers and all if that makes you happy, but in this case alcohol is a red-herring. Even if it’s a fact one of the involved drivers was near comatose from alcohol, there’s nothing to say the sober driver didn’t cause, or fail to take reasonable measures to avoid, the accident.

Progressive did nothing wrong. They examined the facts of the loss and determined their insured was partially liable. In accordance with state laws, the other driver owed nothing and her claim was denied.

That said, based on what must surely be unbiased, nonsensationalistic, and complete reporting of the abc News article, I can’t say I as a claim representative would have stuck to my guns through litigation on this one. With two witnesses gving conflicting testimony about a light, it’s a good bet I’ll find the one without brain damage to be the more credible.

*South Dakota is actually a bit vague, having the unique “slight in comparison” standard that amounts to the same standard in practice.

eta: totally ninja’d by jtgain, nice job.

9

Based on the article, I might question Progressive’s evaluation of the facts, if not the law. The article says that the only basis for determination that the insured was partly at fault was a statement from a passenger in her car, who suffered brain damage in the accident. It’s hard to see how Progressive thought that that testimony would convince a jury to find against a sympathetic insured.

10

Tangentially, but ultimately pertinent to cases such as this one:

How can a drunk driver run a red light and not conclusively be 100% at fault? I am having trouble imagining a hypothetical in which the woman could even be 1% at fault.

11

:confused:

What the heck could that passenger have possibly said that overrode “the drunk driver that ran a red light slammed into us”?

12

Taillight out, tire tread near wear limit, smudge on windshieild. Remember , you’re dealing with insurance companies and lawyers. Anything goes.

13

An insurance agent once explained to me that under the “no fault” insurance rules, you’re already considered partially at fault for simply starting your vehicle and leaving your parking spot. If you hadn’t been driving, you wouldn’t have been in a position to have been involved in an accident.

As far as Progressive’s support for “the other driver”, that’s just insane. When I pay an insurance company for vehicle coverage and legal representation if the situation warrants, I expect them to represent ME and no one else.

The other driver didn’t have insurance which also means they didn’t have an insurance company lawyer to represent them. The other driver has the option of hiring their own lawyer but that should NOT include Progressive’s lawyers. That should be a conflict of interest issue.

If current law allows Progressive lawyers to legally assist “the other guy” against Progressive’s own paying client then that law needs to be changed, post haste.

Whatever the outcome of this particular issue, I see no reason to purchase Progressive Insurance when they turn on their own clients.

14

Part of what offends people about this story is that not only has Progressive not paid the rest of the woman’s policy, they’ve actually assisted in the defense of the other driver. So they’ll pay for that, but they won’t pay the insurance policy their late client purchased even though the other driver’s own insurance company agrees he was at fault in the accident. Progressive’s basis for doing so seems very flimsy. Does Progressive really think Fisher was at fault? Maybe they do. Or maybe they thought as a broader matter of policy that in cases where there is any kind of dispute, it’s a good investment to spend some money on the driver’s defense because they might not have to pay the rest of the policy (or not as much of it), so they’d save money overall. It does pretty well confirm the worst things people say about insurance companies.

15

By the way as far as I know, the driver who killed Kaitlynn Fisher was not drunk. The original Matt Fisher blog post didn’t say the driver was drunk and neither does the story jtgain linked to. They just say the guy blew a red light and crashed into Kaitlynn Fisher’s car.

16

Rhetorically (not aimed at runner pat):

None of that has any exacerbating influence in an accident where someone runs a red light and T-bones someone else. I would hope any arbitrator or judge would summarily dismiss those kinds of arguments.

17

you make it sound simpler than it is. The debate on this board is just part of a HUGE shitstorm of public outrage over Progressive’s actions here. That HAS to be costing Progressive millions in business. I mean, Flo is looking real ugly to me right now, y’know? So there has to be some balance on that issue. Of course, the lawyer may not have been able to predict the shitstorm. How do you think Progressive shareholders are feeling about this?

18

A couple of misconceptions posted here, one by me. :slight_smile: Marley23 is correct. The article doesn’t say that the other driver was drunk, but I’m sure I heard it somewhere. Until I have a cite, though, we will assume he wasn’t.

First, the other driver did have auto insurance, however, his policy maxed out at $25k. That was not enough to compensate the victim’s family, so they filed a claim with Progressive to get more under her underinsured motorist coverage.

The other auto insurance company fought paying the $25k because they felt that the victim was contributory negligent. Progressive sat in at the defense table and joined in their theory.

It went all the way to trial and Progressive and the other insurance company LOST. The jury found the other driver 100% at fault and so other insurance company ponies up $25k, plus Progressive pays the rest, up to $100k.

However, today they settled with the victim’s family for an unspecified amount ABOVE the policy limits to head off a bad faith claim.

My problem with this is where to draw the line. Doesn’t an insurance company have the freedom to protect its interests in court if there is evidence to suggest contributory negligence? Further, my understanding of bad faith against an insurance company was when they failed to defend you in good faith against allegations that could open you to personal liability. THAT is what you pay premiums for: So that if you are found negligent in a lawsuit, your home, cars, and other property aren’t seized to pay a judgment.

This case is the opposite. The victim’s family was suing the other driver. The insurance company, AFAIK, doesn’t owe you a duty to sue on your behalf. They owe you a good faith investigation of the facts before not paying you, and there was enough of a close call in this case for the judge not to grant summary judgment, but to let it go to the jury. In that case, I can’t see how/why an insurance company shouldn’t be allowed to assert its rights in court.

19

Missed the edit window: Also, for a person to be negligent, that negligence had to have “proximately caused” the accident. Just by being born, driving on a public road, or having bald tires (in an accident where your vehicle is stationary) is not enough for negligence. She either had to do or not do something that a reasonably prudent person in her situation would have done to avoid the accident.

For example, maybe her headlights were turned off at night. That would get you at least partially at fault because the other driver may not have seen the car.

20

Progressive didn’t do anything that most other insurance companies do, which is jerk their custimers around trying to eliminate or minimize their payout. I have seen stories naming just about every company there is. The exeptions used to be Allstate and State Farm, or they were as far as public perception went, having very good reps for excellent customer service. But in the last 10-20 years, they’ve joined the pack. It’s no longer enough just to make a profit – they have to squeeze every penny of profit out at the expense of virtually everything else.