We read -- and I write -- a lot about the need for transparency in insurance these days, be it auto insurance, homeowners insurance or health insurance. But transparency brings with it a responsibility to do our part as noninsurance experts to understand the settlement process before we cry foul.
In this regard, a social media flash mob failed to grasp the basics of a court case last week and instead rushed to judgment against Progressive for doing what most auto insurance companies would do in its place to protect their customers.
The online outrage ensued after New York-based comedian Matt Fisher posted a blog that claimed that Progressive -- which insured his sister Kaitlynn's vehicle in 2010 when she was struck and killed by an underinsured driver -- was actually defending the other driver in a court case to avoid paying a $75,000 uninsured/underinsured benefit to his sister's estate.
Fisher pointed out that Nationwide, which insured -- or rather underinsured -- the other driver, had been quick to pay out the $25,000 maximum benefit, leaving the bulk of Kaitlynn's $100,000 UM/UIM coverage for Progressive to pay. Matt Fisher took that to be a green light that the guy was at fault for running the red light.
What went missing from Matt Fisher's account was that in Maryland, the other driver must be legally at fault in the accident before an auto insurance company has to pay a UIM claim.
"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," Progressive said.
One key conflicting eyewitness account came from a female passenger in Kaitlynn's car who had suffered brain damage in the accident and was unable to testify until two months after the crash. According to the Fisher family's attorney, the passenger said Kaitlynn was at fault, but the woman's injuries and memory loss made her testimony unreliable.
"A trial was necessary so that a jury could review all of the evidence and come to a decision," Progressive said. "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."
In other words, it could well have seemed as if Progressive was "defending" the other driver in the trial.
On Aug. 9, a jury found the other driver at fault in the fatal accident. Progressive reached a settlement with the Fisher family one week later.
Did Progressive do the right thing by waiting for the court to decide who was at fault? Or should the company have saved the family additional trauma and themselves a PR black eye by paying promptly?
What would you have done?
Follow me on Twitter.
Subscribe to Bankrate newsletters today!