Progressive May Be Accused of Insurance Bad Faith in Maryland Auto Accident Claim

In what some are describing as a perfect example of insurance bad faith, insurance company Progressive pitted itself against one of its own deceased clients in court. The company is publicly stating that its intentions were purely professional and ethical: it was simply defending its own interests rather than the at-fault driver. Family members of the victim suspect that the trial was simply an attempt to avoid paying a $75, 000 policy claim. Progressive’s goal was to show that the other driver—who was under insured—was not at fault. The policy was only payable if the other driver was determined to have a caused the accident. A jury found that the other driver was responsible for Kaitlynn Fisher’s death and Progressive has now reached an undisclosed financial settlement with the family that meets or exceeds the original policy requirements.

According to the Fisher’s attorney, the payment “‘is for their failure to exercise good faith towards their insured’” Allen Cohen told CNN. Though the case is significant, it is not uncommon. What makes the case more unusual is the amount of attention it has been accorded in the news media. Much of this attention was inspired by Internet posts by one of Katie’s family members.

Matt Fisher—the accident victim’s brother—began posting to social media sites about the case and garnered national attention (http://money.cnn.com/2012/08/17/technology/progressive-settlement/index.html). His goal was achieved: to bring attention to the memory of his sister and lament the bad faith that Progressive demonstrated in the wake of her death.

Katie was killed in 2010 by Ronald Kevin Hope III. He ran a red light in Charles Village, Maryland that caused the heinous accident. The driver was underinsured but did have Nationwide insurance. His insurance company paid $25,000 to the Fishers shortly after the accident. But Progressive would not honor Katie’s policy even though she had comprehensive coverage. This included protection resulting from an accident with an underinsured or uninsured driver. A trial was needed to determine fault before Progressive would honor the claim.

Matt Fisher spent considerable time and effort reporting on the trial using his tumblr account to blog a variety of details and, at times, to simply rant. He wrote in one post “‘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” (http://abcnews.go.com/Business/family-woman-killed-car-crash-accuses-insurer-defending/story?id=17002650&page=2#.UDaOYdZlSSo). It was not the struggle of the trial that seemed to upset the family; it was the insurance company’s active participation against one of their own policy holders. For many attorneys who specialize in cases involving insurance bad faith, the Fisher case is not surprising.

To get compensation and to bring attention to the bad faith practices, the Fishers were forced to continue formally dwelling on Katie’s death. By filing suit against Hope and naming Progressive as a defendant as well, they sought to get justice and compensation for the loss of their sister and daughter. On August 9 a Maryland jury determined that Hope was at fault. Katie’s estate was awarded $760,000 plus legal fees. Since Hope is the primary defendant, the family will likely never see that amount. However, Progressive must pay at least its share of damages since Katie’s policy must be honored.

While Progressive did not actually provide legal counsel to Hope, they did protect their own financial interests against one of their policy holders. This may be a classic definition of insurance bad faith. In fact, there may be more legal troubles ahead if the Fishers and their attorney decide to pursue an insurance bad faith action against Progressive. But even if that does not happen, the insurance company has troubles ahead.

Insurance companies that put their own profits above the benefits of their clients are commonplace. But Matt Fisher’s media campaign garnered tremendous attention and even kindled interest by the Today Show, Good Morning America and the national news media. Perhaps more significantly, this case has been followed and commented on across the Internet.

Fisher’s tumblr blog has been read by thousands and portions of it have been reprinted in the Baltimore Sun, The Chicago Tribune, the New York Daily News and nearly every newspaper in the country. A YouTube video in which the case is discussed and encourages viewers not to buy Progressive insurance has been viewed more than 29,000 times (http://www.youtube.com/watch?v=FMG2kXkKfTw&feature=fvst). Thousands of tweets have been reported of people claiming to have dropped Progressive insurance in the wake of the Fisher case. Unfortunately, Progressive may be no more guilty of bad faith than other insurance companies. If the practice is commonplace, where should people turn for insurance?