Progressive Rips Off Its Dead Insured

This week, Matt Fisher blogged about Progressive Insurance Company, which insured his sister, Katie, two years ago when she died in a car accident.

The company had sent its lawyer to court — not to assist Katie’s estate but to argue that the driver of the other car — who had a suspended license and little insurance — was the innocent party. Or, as Mr. Fisher wrote online, “My Sister Paid Progressive Insurance to Defend Her Killer in Court.”

The outrage on social media came swiftly, and it was brutal. Here’s more.

In the end, the saga of Ms. Fisher and her family isn’t just about whether Progressive made a needless mess of its reputation this week. And it’s not simply about whether everyone should drop their Progressive policies in protest either, as scores of people have threatened to do. We need to take a close look at our coverage and determine whether we have a fundamental misunderstanding of how various auto insurance policies actually work.

Katie was just 24 when she died in Baltimore with two degrees from the prestigious Johns Hopkins University. (I can also relate to this story because one of my daughter’s best friends just graduated from there and my mother was from Baltimore.)

Ms. Fisher had $100,000 in liability coverage per person in this accident, and three people wanted a piece of it: a passenger in her car, the driver of the car that hit her and a passenger in that car.

Progressive sized up its legal risks. Three individuals thought Ms. Fisher had run a red light — the police officer who filed the accident report (but who did not witness it), Ms. Fisher’s passenger and the driver of the other vehicle. On the other hand, one eyewitness said that it was the other driver who ran the light.

At that point, Progressive chose to pay the liability claims. This is thorny, because liability insurance pays money to injured people even if the policyholder is at fault. But the dispute in court that so infuriated Ms. Fisher’s brother, Matt, also affected a different policy she had — underinsured motorist coverage — that operates under different rules.

That coverage is something you buy if you’re worried about somebody hurting you who doesn’t have much insurance. The driver who hit Ms. Fisher had only $25,000 in liability coverage, and her parents tried to coordinate claims from his company and their daughter’s to collect the $100,000 total that her underinsured motorist insurance covered.

The challenge with the coverage, however, is that it pays you money only if the other driver is at fault. Many states, recognizing the subtleties in assigning blame, will pay out partial claims based on the share of responsibility. But Maryland is among a small number of states where insurance policyholders may get nothing under the terms of their underinsured motorist policies if they’re even one percent at fault.

Even as Progressive was paying money to the injured people under the terms of Ms. Fisher’s liability policy, her family was making a claim on her underinsured motorist policy that she wasn’t responsible at all.

Please feel free to contact me if you have any questions about a liability claim or about your insurance coverage.

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