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Progressive is a competitor to my employer. I look with great interest at situations such as this one.
They are in a bad spot due to the laws of Maryland; however, they couldn't look anymore foolish than the do in this lawsuit. The negative publicity of this one is an ocean compared to what they would have paid out on the policy.
http://kansascity.legalexaminer.com/...oogleid=303620
Legal minds of this board, what say you?
Legal minds of this board, what say you?
Popcorn is popping and the easy chair awaits. I really want to hear their opinions. I know I have mine, but a good lawyer told me not long ago that fair has nothing to do with the law.
Shocking....negative PR has that effect,...
http://articles.baltimoresun.com/201...ce-matt-fisher
I had progressive at one time. Cancelled it though because in my book "progressives" suck
Wow, for 75,000? Really bad move on progressives part.Quote:
Originally Posted by Catonahottinroof
Maryland's law allows for denial on underinsured motorist coverage if the defendant isn't 100% at fault. (lobbyist handwriting all over that).
I'm sure this has been done prior by other carriers as a means to not pay what a policy affords, but that doesn't make it right.
Progressive is paying a separate settlement to the family to avoid a complaint to the Maryland Insurance commissioner. This is what happens when bean counters control a company...
http://www.nytimes.com/2012/08/18/yo...pagewanted=all
Interesting stories. I don't have a lot of empathy for Progressive, and with my usual caveat about newspaper stories and media not telling anywhere close to all the facts, but taking angles to sensationalize, I do have a couple of thoughts.
First, it looks like the insurance industry had an incredible lobby in that state. Those laws seem bent-over-backwards to protect the companies, and not the consumers. It happens.
I *do* see the logic, however, in not allowing direct actions against insurance companies. Forget this case just for a second. Joe and Amy are in a car wreck. Amy is hurt, but she may have been contributorily negligent (in my state, that's a complete bar to recovery. In most states it isn't, but it can reduce their recovery).
Amy sues Joe. Well, a judge and a jury can determine who is at fault, free of prejudices, and they have two individuals there that they have to determine.
What if instead, Amy knew Joe's insurance carrier was Acme Insurance, so she sued Acme Insurance.
Now you have a poor, injured young lady who is suing a big, bad insurance company with lots of money, and the jury sees it as David v Goliath. White hat vs Black hat. Good vs Evil.
So you can see, to get a fairer picture, you wouldn't want to see that. Let the facts and law play out, and not sympathy.
Let's bring that back to this situation.
Here, Joe's insurance policy is a very low one (that's another subject--too many state laws, IMHO, require too low of minimum insurance requirements.)
But at least Amy has contracted with her own insurance carrier to provide "extra" coverage if she is hurt worse than what someone else has (underinsured motorist) or if they illegally have no insurance (uninsured motorist).
Now the question is, did Amy or Joe cause the accident? Who is at fault?
Well, Joe's insurance company tendered their policy limits without even needing to go to trial. Remember, Amy can't sue Joe's insurance company to get that; instead, she has to sue Joe to remove the inherent bias that could be present.
So Joe's insurance company says, "yeah, we're liable." Or are they? Maybe the $25,000 low limits policy wasn't enough, in a questionable liablity case, to warrant having to take the case to trial. And maybe the State has a law, as some do, that says if an insurance company fails to tender limits in a situation where liability is clear and damages exceed the policy, they can be liable for bad faith. So they make a business decision.
Now Amy is trying to recover against her insurer for the underinsured portion. But there has been no finding of liability by the other driver. The mere fact his insurance company paid the policy limits isn't an admission of liability, and no judge or jury has looked at the facts and the law.
So before HER company can be held liable, she must prove that someone ELSE was liable first. She has not done that yet.
She must do that by suing the at-fault driver.
All of that seems fine. It is at this point, given the facts of this case, where I see "Acme" Insurance company screwed up. That's where they should have just said, "the right thing to do" is to pay the underinsured motorist claim.
I don't know the laws of the state here, and I don't really know the laws of my own state too much in this area. It seems that the company was within its contractual rights to do what it did. But from what I hear, "Acme" isn't as great of an insurance carrier as their good old lovable female spokesperson on TV would have you believe, and I'm not surprised.
I probably left out eleven different things and angles to look at it here, just trying to type this quickly before church.
I'm not an attorney of course, but I work in a claim capacity for my employer for nearly 15 years now. An underinsured motorist policy puts your insurer in the capacity of the 3rd party carrier after their limit has been applied.
For purposes of this case, Nationwide paid their limit relatively quickly, a full $25,000 policy limit. As I understand in Maryland, the deceased estate waives its right to sue the insurer, and in turn must sue the at fault driver to gain recovery in this instance.
With the 3rd party carrier accepting liability at 100%, Progressive then has a decision to make. Pay the claim under the UIM as the 3rd party carrier did. It's reasonable to assume if Nationwide assessed a comparative negligence amount to either party, Progressive's decision to litigate is clearly understood, but Nationwide didn't. They accepted 100% liability and put progressive in the very same position legally.
If this was my claim, I would have paid the $75k and went on to the next piece of business. Someone made a very bad decision to pursue this one as there was already a $760,000 verdict against the at fault driver awarded to the deceased's estate.
This is what happens when bean counters make decisions purely based on bottom lines. The negative publicity Progressive received can't be measured, but it's in the 100x range of what paying the $75k would have been in the beginning.
You're the expert here, Catonahottinroof, and I agree with ya 100%. Poor business decision.
I'm thinking the law ain't that bad; just their use of it. I know if I owned an insurance company, I'd be happy that there was no direct action against me without proof of liability (which triggers the policy, of course.) In other words, there's no underinsured coverage at all UNLESS another driver were at fault. And "at fault" doesn't mean another company deciding to pay their low policy limits.
Let's put it another way.
Assume, for the sake of illustration only, it wasn't a $75,000 underinsured motorist policy, but a $7.5 million underinsured motorist policy.
You're the company. It's your $7.5 million at risk. Would you want to simply hand over a check just because another company made a business decision to pay a low limits $25,000?
The bad thing here is Progressive just made a poor decision for the $75k. From what I hear, that's not the only poor decision they make.
(Note--when they refused to pay the $75,000 underinsured motorist claim, there was no $760,000 claim against the other driver at the time. Liability had not been established.)
Liability had been established, just the amount had not been determined. Nationwide set the dominos in motion by accepting 100% and progressive was fighting this from downhill to start. If Progressive felt comparative negligence applied, the original notice of loss was the place to establish that, not a year later when it became obvious their insured will follow through with suit against the claimant.
I agree with the 7.5 Million scenario....you fight where you have reason to do so. UIM policies are increasingly being tapped by responsible parties to cover their own losses when drivers with no insurance/small limit policies are involved. I'm not sure if they were trying to set a precedent on this particular loss or not. Every now and then someone tests the water. This was a terrible place for that IMO.
The caveat of 1% of liability in the Maryland is bad. Lobbyist tainted, keep carriers from paying anything, yet alone limits bad and leaning to the black side of the grey area bad.
I suppose the lesson to learn from this too is the power of social media. Being on the wrong side of the tide is akin to being on the Titanic.
I'm confused--why do you think liability had been established? I may have missed something, but no way, no how is liability established just by an insurance company paying out policy limits.
Put it this way. Let's say you are a multimillionaire, but you carry only $25,000 liability policy, for whatever reason. Insurance company cannot establish liability by paying the amount. All they are doing is making a business decision to pay. It is not an admission of liability by their insured.
In this case, not until they obtained the $760,000 judgment against the estate was liability established.
Otherwise, I agree with you on every other part.
Quote:
Originally Posted by Catonahottinroof
Upon original claim investigation by both carriers, Nationwide established liability existed with their insured at 100% and Progressive didn't contest that. I'm speaking in terms of the insurance carriers. In court, this trial was to establish a percentage of liability to the decedent.
The defendent (both Nationwide as primary counsel, Progressive secondary under its UIM policy) are fighting uphill in court to establish any comparative negligence on the decedent as they both agreed in their respective investigations that Nationwide was at fault and paid 100% of their policy limit of $25k. If that wasn't the case, you'd see a 90/10, 80/20, 50/50 type of settlement from Nationwide and the decedent's estate would collect under their first party coverage for the balance.
Progressive used the 1% of negligence hope to not pay the UIM policy. it's despicable and they are getting a PR beating that's very well deserved.
...That controls the law...Quote:
Originally Posted by Catonahottinroof
I did mostly insurance defense work and some plaintiff's work here in Kentucky for 8 years. Finally got sick of it and moved into another area of the law where I'm very happy I don't have to deal with those kinds of cases anymore.
Since insurance is a matter of individual state law, each state has its own rules for how underinsured motorist cases have to proceed and many of them are very arcane and don't make sense to laymen (or lawyers!). When you add the concept of subrogation to a UIM case it really gets screwy. I wouldn't even pretend to know how Maryland's work. This blog post (written by a plaintiff's lawyer who certainly has no love lost for Progressive) indicates that what Progressive did was the way these kinds of cases have to be handled in order for the UIM carrier to protect its subrogation right in Maryland.
From the article:
Another complicating factor is that Maryland, according to the blog post, is a contributory negligence state. That means that if a jury finds the Progressive insured even 1% at fault, her estate gets nothing.Quote:
But left unsaid is discussion of the question of whether Progressive should contest these types of cases if it really believes, in good faith, that the at-fault driver is not responsible. The answer: of course. It is weird - really weird - for plaintiffs when their own insurance company steps in the shoes of the carrier. That is what made the original blogger so mad. The idea that his sister's own insurance company was taking the side of the killer in her wrongful death claim. But if there is a defense to be made, that is exactly what the UM carrier is supposed to do. Step in and defend the claim. Now, I don't think Progressive gives its insureds, as it should, the benefit of the doubt in these cases which would mean we may have framed a guilty insurance company. (Think Mark Furman planting the glove on O.J.). But I also don't expect the uninsured motorist carrier to just roll over, just because an uninsured or underinsured motorist claim has been brought.
This is where the initial investigations (both carriers) needed to show something other than 100% fault being assigned to Nationwide's client, and my reference to both carriers fighting uphill to establish 1% negligence.Quote:
From the article:
Another complicating factor is that Maryland, according to the blog post, is a contributory negligence state. That means that if a jury finds the Progressive insured even 1% at fault, her estate gets nothing.
Maryland's law is really, really toxic to their residents in this instance and has lobbyist fingerprints on it...