UIM Coverage Issue Goes Viral; Great Misunderstandings Ensue

For whatever reason, insurance companies may not have the best reputations. So, it comes as no one surprise that a recent Tumblr post entitled, “My Sister Paid Progressive Insurance to Defend Her Killer in Court,” has gone viral and garnered much attention across the Internet. The piece, penned by comedian Matt Fisher, documents his family’s struggle to recover underinsured motorist (UIM) benefits under a Progressive auto policy. Fisher’s sister, Katie, was  killed  in a motor vehicle accident after another driver reportedly ran a red light.    The liability carrier for the other motorist tendered its policy limits shortly after the accident.  Thereafter, the family turned to Progressive for additional UIM benefits.  For reasons not specifically documented in his post, Progressive denied coverage.  In order to pursue those benefits, the family filed suit against the other driver.  Progressive, as the UIM carrier, appeared in the matter and defended the case.  Although the jury ultimately returned a verdict for the Fishers in the matter following a trial last week, Matt Fisher was none too pleased with Progressive’s conduct, leading him to write a series of posts on the issue.

First off, it should be noted that there is not much information in the public record about the specifics of this case, other than Fisher’s original post and a brief reply from Progressive.  Accordingly, it’s challenging to opine about the specifics of this case without access to trial transcripts, court orders, policy documents, or other information that might usually be available in a reported case. But, as we see it, much of the confusion here lies in the very nature of UIM coverage.

Indeed, following Fisher’s post, a firestorm was unleashed against Progressive.  Celebs such as Wil Wheaton and Patton Oswalt took to Twitter, campaigning against the company.  The story has also been well-documented on other sites, including Thought Catalog and Gawker.  Despite this fanfare, however, Progressive appears to be getting a bad rap, primarily because of a great misunderstanding of the sometimes counterintuitive nature of UIM coverage and benefits.

For starters, we do not know exactly why Progressive denied coverage in the first place.  As noted above, we do not have access to many of the relevant documents in this case, including any letters explaining the denial of coverage. But, we imagine it may have had something to do with perceived liability.  In his own post, Fisher, who attended the trial, admits that there may have been some issue with his sister’s comparative fault:

Now, I don’t discount the possibility that Katie was at fault in the accident, but it never really looked that way. The only witness who gave a statement on the day said that Katie had the light, etc. The totality of the evidence left some room for argument, but that will be the case any time there’s a catastrophic car accident that doesn’t happen underneath an array of video cameras.

Further, as Ted Frank of the Point of Law blog notes:

Maryland is one of the few remaining contributory negligence states: if Katie was 1% at fault in the accident, there is no liability to the other driver or Progressive.

In other words, under Maryland law, if Katie played any role – no matter how slight – in contributing to the accident, Maryland state law would not permit her to recover.  Thus, we must consider “the totality of the evidence” and Maryland’s adherence to the contributory negligence doctrine when analyzing Progressive’s initial coverage decision and subsequent actions in defending the case (as was its right to do so).

Second, a simple explanation of the UIM concept may help to clarify the misguided notion that “Progressive defended Katie’s killer.”  In reply to a Progressive statement that  it did not serve as an attorney for the defendant, Fisher outlined the conduct of “Progressive’s legal team” at trial in support of his argument.  In this instance, both Fisher and Progressive are correct – to a degree.  Progressive did employ lawyers – not in-house – to represent its interests in the matter.  While Progressive essentially stepped into the shoes of the defendant at trial, however, it did not serve as his attorney.  The lawyers represented Progressive.  Even though the defendant may have sat in the chair right next to Progressive’s lawyer, there was not an attorney-client relationship.

To the lay person, it may be a strange dynamic when one’s own insurance company technically “defends” the underinsured motorist.  However, here, Progressive had an ostensibly legitimate coverage position, and this was the forum available to the insured in which to litigate it. While we do not know all of the facts in this matter, nor are we aware of  Progressive’s internal decision-making process, UIM cases are very common and sometimes do culminate in a trial where this very dynamic comes into play.

We recognize Fisher’s frustration.  Sitting through a civil trial and fighting with an insurer is the last thing anyone wants to do after the loss of a loved one.  Just as every accident does not necessitate the insurer paying under its policy, every accident with an uninsured/underinsured policy does not necessarily entitle the insured to UM/UIM benefits.  Insurers, including Progressive, should investigate every accident and accordingly make coverage determinations based on liability and damages.