First and foremost, my heart goes out to Matt Fisher in the tragic loss of his sister. But like most Americans, Matt Fisher simply does not understand how insurance works.
Insurance is maddening, confusing and to the untrained observer, completely illogical.
But to insurance professionals, it is completely understandable and predictable.
And as an expert, I offer my opinion in this case.
First, my credentials as expert:
I am the President and Owner of a Virginia based Auto Insurance Agency and I am a licensed property and casualty agent. My agency is an independent agency which means I sell insurance for a number of companies. And Progressive Insurance is one of those companies and pretty much every independent agency in the country sells Progressive Insurance.
I am not saying this because I am an agent, but Progressive is one of the best companies at settling claims. They are quick, efficient and fair based on the experience my customers have had with them.
But a lot depends on the circumstances of each claim. And the case with Matt’s sister Katie was a really complex one.
And while I am not privy to the exact details of this case as I would be if I were the agent, it appears that Matt’s sister Katie had fairly high liability limits on her policy and the other driver had the minimum limits. The figures I have heard are that Katie had $100,000 Bodily Injury limits and the other driver had $25,000 “minimum” bodily injury limits.
Is the $25,000 was, indeed, some sort of minimum limit, that tells me that the other drive did not reside in Maryland where the minimum limit was $20,000 in 2010 and has now been raised to $30,000. Virginia has a minimum Bodily Injury limit of $25,000 and perhaps the other driver was a Virginia resident, or some other state with a $25K minimum.
It was reported that the other driver had Nationwide and they paid out the $25,000 fairly quickly.
Now most policies include coverage for both uninsured and under-insured drivers.
Normally, what that means is that your insurance will “take the place” of the insurance coverage the other driver failed to have, or it will “take the place” of him failing to have sufficient coverage to pay for your injuries. And in those cases, the limits you have purchased for yourself “pretend” to be the other guy’s policy.
So, in essence, Progressive became the insurance company of the driver who ran into Katie.
One of the most inflammatory statements that Matt made was that Progressive’s lawyer was actually taking the side of the driver who killed his sister (as Matt put it).
Well, since her insurance became his insurance because of his low limits, that was the correct thing for Progressive’s attorney to do. Although it sounds pretty horrible you have to admit.
And Matt said in his blog “Now, I don’t discount the possibility that Katie was at fault in the accident, but it never really looked that way. ” So even he was not 100% sure his sister was not at least somewhat at fault. Which was the same stance Progressive took.
But what makes this case even worse is that Maryland is a “no fault” state which means that if one driver is 1% at fault and the other driver is 99% at fault, they are not responsible for the other’s damages or injury. Virginia is not like that I am happy to say. And when it comes to establishing fault, that usually takes a court. And if Katie were found to be even 1% responsible, the other driver is off the hook. It is a horrible law, but it is the law.
But the most Progressive is on the hook for is the difference between what Nationwide paid ($25K) and Katie’s policy maximum ($100K) which is $75,000.
But there is another question to consider. Normally, under-insured coverage is used to pay direct hospital costs, therapy and some other costs like loss of income. These things are billed and documented.
But how much does a person’s estate collect for a death? There’s no printed table for that and it has to be decided by a court.
It’s not like Progressive could just give the woman’s estate $75,000 and call it a day.
In the end, the jury awarded $760,000 to Katie’s estate and established that she was not at fault with that reward.
That means the Progressive will most likely pay $75,000 and file a suit against the man to try to “subrigate” the $75K from him. And the woman has a judgement of $760,000 against the man.
The question that remains is whether or not the man has any assets. If he owns a home, that could be sold to pay the judgement to the estate.
More than likely, he has very little because it is the job of his Insurance Agent to advise his client on the level of coverage that is needed. If he owned a home, Nationwide would have most likely advised him to purchase higher coverage to protect his assets from a situation such as this. And if that were the case, Nationwide would not have been so quick to settle. It would have gone to court.
There is a common misconception that the coverage you purchase on your auto policy actually covers you. It does not. The greatest portion of the policy – the Bodily Injury – is primarily to protect the other party you may potentially harm. Only when the other party has no insurance or insufficient coverage for damages he may have caused you does your insurance cover you. Of course collision and comprehensive coverage, which is optional as far as states are concerned, will pay to repair your vehicle if you cause an accident. And if you are paying for the car, your bank will most likely require you to keep Comp and Collision on the vehicle. Med Pay is also an optional coverage, but the amounts are generally a few thousand and this coverage is not intended to take care of major injury or death.
I had a client threaten to file suit against me and report me after she and her husband were in an accident because she was unhappy that her insurance paid for her husband’s injuries and not hers. The woman admitted that she was talking on her cell phone while driving and ran off the road and lost control in some deep gravel on the side of the road. And she hit a tree.
By her own admission she was negligent. She and her husband both were treated and released at a hospital and the insurance paid his medical bills but not hers. She had taken out the policy, signed the papers and made all the payments.
I tried to explain to her that her husband’s bills were paid because she was liable for his injuries because of her negligence. The fact that they were marries was irrelevant. He could have been a friend or even a stranger, or even a hitchhiker standing on the side of the road and his injuries would be covered.
But not her injuries. Liability coverage only pays for injuries toy caused to others. She was on her own.
Of course, nothing came of her threats because the insurance company acted properly. (Never mind the fact that I have absolutely nothing to do with the claims process, all of that is handled by adjusters at the insurance company.)
So, the Maryland accident was a horrible thing. Nothing will bring Matt’s sister back. But Progressive Insurance acted exactly as they should have. They cannot set a price on the life of Katie. And they have a responsibility to make sure all of the facts are heard in the case. Even those that seem to place blame on their insured, Katie.
In the end, the jury decided Katie’s estate was due $760,000.00. That is a sum that will probably never be collected, although Progressive will probably make up the difference between the coverage the other driver had and Katie’s policy limits.
And if you are thinking of buying insurance online and acting as your own agent, unless you understand exactly how insurance works and understand that the coverage you buy is about more than protecting your car – it is also intended to protect your house and other assets – the best advice I can give you is take the time to go into a local agency and let a licensed agent help you make the right decision on what coverage you really need.
Most likely, you will not pay a penny more in person than online. And you can rest easy knowing that this complex issue has been handled by a professional. And a good agent will let you know what you don’t need as well as what you do need.