Progressive Insurance Plays Word Games In PR Disaster
More than two years ago, a young woman in Baltimore was killed when her car was struck by another car. The guy’s insurance paid up immediately; he had run a red light. He was underinsured, but the woman carried underinsured motorist insurance.
Here comes the big but: her insurance company refused to pay.
Flash forward to this week, when her frustrated brother, Matt Fisher, explains his impertinent tweets about Progressive Insurance on Tumblr.
In hopes that a jury would hang or decide that the accident was her fault, [Progressive] refused to pay the policy to my sister’s estate.
Under Maryland law, the family had to sue the other driver in civil court.
[What my parents] had to do was sue the guy who killed my sister, establish his negligence in court, and then leverage that decision to force Progressive to pay the policy.
Now my parents don’t harbor much venom for the guy who killed my sister. It was an accident, and kicking that guy around won’t bring Katie back. But kicking that guy around was the only way to get Progressive to pay. So they filed a civil suit against the other driver in hopes that, rather than going to court, Progressive would settle. Progressive did not. Progressive made a series of offers (never higher than 1/3 the amount they owe) and then let it go to a trial.
And who showed up in court, sitting with the defendant, asking questions, making arguments before the jury?
The lawyer was Jeffrey R Moffet, Esq. and he was in court because on May 19, 2001, Progressive was given stature as “party Defendant.” The court order continued:
Progressive Insurance Company is GRANTED all rights to participate in this proceeding as if it were an original party to this case.
At the beginning of the trial on Monday, August 6th, an attorney identified himself as Jeffrey R. Moffat and stated that he worked for Progressive Advanced Insurance Company. He then sat next to the defendant. During the trial, both in and out of the courtroom, he conferred with the defendant. He gave an opening statement to the jury, in which he proposed the idea that the defendant should not be found negligent in the case. He cross-examined the plaintiff’s witnesses. On direct examination, he questioned all of the defense’s witnesses. He made objections on behalf of the defendant, and he was a party to the argument of all of the objections heard in the case. After all of the witnesses had been called, he stood before the jury and gave a closing argument, in which he argued that my sister was responsible for the accident that killed her, and that the jury should not decide that the defendant was negligent.
I am comfortable characterizing this as a legal defense.
You might want to read that again. Progressive gambled. It basically defended “the other guy” so that it would not have to pay out on its own policy. This is a perfect example of what is wrong with insurance today: stockholder lust for profits (and management lust for the bonuses that accrue to said profits) runs slipshod over customer fairness.
And how did the world find out about this?
Then the story made mainstream media.
On Tuesday, Progressive issued an insipid response on its blog. Here it is, in full:
I’d like to take this opportunity to explain Progressive’s role in this complex case. First and foremost, our deepest sympathies go out to Kaitlynn Fisher’s family.
To be very clear, Progressive did not serve as the attorney for the defendant in this case. He was defended by his insurance company, Nationwide.
There was a question as to who was at fault, and a jury decided in the Fisher family’s favor just last week. We respect the verdict and now can continue to work with the Fisher family to reach a resolution.
The 300+ comments on the post are scathing. The only thing Progressive did right was to keep comments open; but no one from the company responded to the commenters that I could tell.
The 300+ comments on Progressive’s first Facebook post and 100+ comments on the second are scathing.
The posts on Tumblr are scathing.
The tweets directed at Progressive are scathing. And Progressive’s communications team let its perky avatar remain affixed to its Twitter account. The company provided a canned response to everyone who had tweeted @Progressive. Over and over and over.
As if that’s not bad enough, that insipid blog post — the one the infuriated so many in its implication that Fisher was lying — was itself kinda a lie.
Two days later, this is what Progressive admitted (emphasis added):
As of this morning, an agreement has been reached with the Fisher family to settle the claim. Prior to that, we were cautious with our responses, but now that the agreement has been reached, we’d like to further clarify Progressive’s role in the trial.
Under Maryland law, in order to receive the benefits of an underinsured driver claim, the other driver must be at fault. Sometimes this can be proven without the need for a trial, but in Ms. Fisher’s case, there were credible conflicting eyewitness accounts as to who was at fault.
A trial was necessary so that a jury could review all of the evidence and come to a decision. In those circumstances, under Maryland law, the insurance company providing the Underinsured Motorist coverage is considered a defendant. As a defendant in this case, Progressive participated in the trial procedures on our own behalf while Nationwide represented the other driver.
What was it that Progressive had to get “agreement” on?
The judge ruled in favor of the plaintiff (the estate) plus expenses.
Why did Progressive drag this case out for two years?
Katie Fisher was killed by an underinsured motorist whose insurance company had already paid the family, according to her brother.
No one has explained why a lawyer whose LinkedIn profile says he works for Nationwide but who lists a different law firm — Law Offices Of Andrew B Greenspan — as his employer in court documents would be defending the driver if it, Nationwide, had already settled.
I know. It’s the adversarial system we’ve established.
Oh. And that outside-appearing law firm isn’t: “This law firm is actually what we call an ‘in-house’ firm; the lawyers are all employees of Nationwide Insurance.”
How did we let this system become this corrupt?