How to compound bad business with bad social media: @Progressive's crummy job explaining the company's legal defense of a policy-holder's killer

Last night, Mark wrote about Matt Fisher's experience with Progressive Insurance, the insurer for his late sister, who was killed in a traffic accident. Progressive tried to deny Fisher's claim (the other driver was underinsured, but Fisher's Progressive policy included coverage for underinsured third parties) In order to collect full benefits, Fisher's family has had to sue the other driver, and, incredibly, Progressive paid its lawyers to defend the driver that killed its policy holder.

Understandably, the Progressive Twitter account has attracted a lot of negative attention. But whomever is running the social media strategy at Progressive has gotten stuck in a loop. No matter what you tweet @Progressive, you get the same bland PR-speak non-answer assuring you that Progressive has looked into it and everything is just fine, nothing to see here.

Wil Wheaton's got an audio interpretation of what the @Progressive account sounds like to him:

[Flash 9 is required to listen to audio.]

Dear Progressive Insurance PR Bot

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

MORE: Business • christ what an asshole • corruption • twitter • web theory

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http://scruss.com/blog/ scruss

Wil’s version needs a “Fitter Happier” piano accompaniment.
http://www.facebook.com/profile.php?id=1537441576 Matt Segal

The doge does not seem pleased
signsofrain

Although our company is composed of human beings who are really very sorry for what assholes they have been, in the end, we care more about money than conducting business fairly or ethically. If you don’t like it, that’s too goddamn bad. Bad PR is temporary, we have no real incentive to change how we conduct business. Being complete and utter monsters to our policy holders is within our legal rights, and is therefore justifiable morally. We are completely comfortable with the fact that we put a grieving family through hell, and used our financial leverage over them to prolong and intensify that hell and distill it into a fine aged financial and emotional misery that we decanted into a crystal snifter and drank in our penthouses before turning out the lights and sleeping like babies, secure in the knowledge that we did the right thing for our shareholders.
jerwin

Twitlonger says

This user account has been banned and their messages blocked.
- Isalicus
  
  Also: the relevant tweets appear to have been removed from Progressive’s twitter timeline.
  - http://mordicai.livejournal.com Mordicai
    
    Try clicking “All”; I think it defaults to “No replies.”
  - Jade Falcon
    
    The internet never forgets.
    
    http://topsy.com/twitter/progressive
lavardera

I’m never going to get insurance from those cold hearted bastards. Furthermore I’ll relate this story to any friend or family that ever mentions insurance to me. It would be irresponsible of me to not warn them off doing business with such a treacherous company. The sooner they go out of business, the safer place the world will be.
- Conan Librarian
  
  “doing business”
  
  It always did amaze me how in the US, even human life is nothing more then a graph on the quarterly profit portfolio.
  - jerwin
    
    Human life, like all things, must be monetized.
- http://mordicai.livejournal.com Mordicai
  
  I doubt this is unique to them; anyone have any other data points?
mesocosm

It seems to me that the life insurance business monetizes human life by definition.
- Boundegar
  
  You would prefer they told you your sister was priceless, and so they aren’t paying a cent?
  - foobar
    
    I think they’re just being asked to pay what they contractually agreed to, aren’t they?
nixiebunny

Would you expect a company that engages in that sort of business practice to say anything else?
mesocosm

I know that this looks awful on the surface, but I think this is where you need to pause and take a breath and look at the facts. Let’s take a quick look at what happened, based solely on Matt Fisher’s account.

According to his post, Maryland law dictates that if there is a disagreement about an insurance payout, there is no way to sue an insurance provider – you have to sue the insured party in the case. Because this is an unusual situation involving an under-insured motorist, the Fishers are suing the defendant as a proxy, to challenge their own insurers in the courts indirectly.

It seems to me that Progressive is doing exactly the same thing – they are defending themselves by defending the proxy.

There’s no question that the real point of contention is between Progressive and the Fishers, and that the only reason this third party is involved is because of Maryland law.

So I wonder, if the Fisher family were suing Progressive, and Progressive were defending itself, would there be an uproar? No way. It would be regarded as a distasteful but common occurrence.

The problem here, as far as I can see, is that Maryland law has resulted in a contorted lawsuit that makes Progressive seem monstrous. But what else can Progressive do, if they have a valid dispute about the payment amount? Hope that the insured party has adequate representation?

It seems inhuman to do horsetrading when lives are at stake, but that’s literally what life insurance is about – it’s about monetizing human life. The Fishers want a certain amount, Progressive wants to pay out a certain amount, and they’re contesting the matter in court.
- http://twitter.com/DKilfoil David Kilfoil
  
  It is awful. Progressive’s client died accidentally. They should simply pay the insurance benefactors and stop being dicks by trying to weasel out of paying.
  - mesocosm
    
    I am going to assume that you, like I, have no direct knowledge of the facts of the matter, nor the basis for Progressive’s actions, nor a deep knowledge of insurance law. If so, the only basis for your conclusion is because Progressive looks bad.
    
    That is precisely my point – Progressive doesn’t deserve to be pilloried solely because Maryland law makes them look bad in this case.
    
    It’s entirely possible that they’re being unconscionable, but I have seen exactly zero evidence for it, and I strongly suspect you haven’t either.
    
    Legal disputes between to rational, well-intentioned parties happen every day.
    - http://twitter.com/DKilfoil David Kilfoil
      
      So do you work for the insurance industry, or a social-media company responsible for protecting their online image?
      - mesocosm
        
        Mm, yes. Why respond with a reasoned argument when you can simply call me disingenuous?
        
        My only relationship to the insurance industry is that I currently have health and dental insurance.
      - flosofl
        
        Nice ad hominem there.
      - foobar
        
        Care to prove that, mesocosm?
  - czak ivanovic
    
    That’s not the way insurance works.
    
    Insurance law is a subset of contract law with some very specific rules. The rules exist because both sides have incentives to screw the other party (claim fraudulently, lie about coverage, lie about circumstances of an accident, refuse to pay out etc..). Moral hazards abound.
    
    One of those rules is that it is the insured’s job to prove that the ‘event’ falls within the scope of coverage. Then the insurance company gets a chance to show that the event falls into one of the exceptions to coverage (negligence for instance). Matt Fisher states in his article that the negligence issue was live until there was a trial on it.
    
    Due to the funny way the common law handles standing and privity, in order to have a trial about whether or not something is covered you usually end up suing someone in name only (the driver, a homeowner, your wife, your kids) when the person you are actually suing is the insurance company.
    
    Insurance companies also have to fight enough cases to remove or mitigate the potential moral hazard of fraudulent or baseless claims. This sucks, but it is part of what makes insurance possible. We do it here in B.C. for car insurance and we have a not-for-profit insurance scheme.
    
    Now there are ways to make it suck less – awarding court costs for winning helps, rules and norms about civility in court and towards witnesses, reasonable settlement offers etc…
    - http://twitter.com/DKilfoil David Kilfoil
      
      I have a pretty good idea how insurance works. A good friend of mine was hit by an uninsured driver and had to sue her own insurance company to get full coverage of her post-accident medical rehab costs.
      
      That doesn’t mean that insurance law isn’t gamed towards the industry, and that they are soulless profit-seeking, payment-avoiding dicks.
      - czak ivanovic
        
        Do the credit unions down there offer insurance?
      - http://twitter.com/DKilfoil David Kilfoil
        
        I believe it varies from province to province in Canada. The local credit union here appears to only offer mortgage and travel insurance.
- http://twitter.com/uniquponym Pseud O Nymity
  
  “Maryland law dictates that if there is a disagreement about an insurance payout, there is no way to sue an insurance provider – you have to sue the insured party in the case.”
  
  I am confident that Progressive had a hand in writing that law.
- foobar
  
  It doesn’t make them seem monstrous. It puts them in the position of either being monstrous, or possibly losing a little money.
  
  They chose to be monstrous.
- Maria Moliner
  
  “The problem for Progressive, as far as I can see, is that Maryland law has resulted in a contorted lawsuit that makes Progressive look like the monsters they are.”
  
  I fixed it for you.
czak ivanovic

Does anyone have a link to the actual court case? Reading between the lines this sounds a lot like what happens in any uninsured motorist policy case where negligence is a live issue.
Ronald Pottol

Two things, first, who is better? I’ve heard all matter of horror stories from various parts of the insurance industry.

Second, I wonder what is going on. To make a few assumptions, I am assuming that she was an adult with neither husband nor children nor other dependents. So just how much is the death of an adult child worth, legally speaking? I’m guessing, not that much.

So let’s assume that she had a high liability policy, and like so many people do, matching uninsured motorist. So she is killed, the other guys minimal insurance pays off (here in California, that could be $15,000 for her injury, and $5,000 for her car), and lets say that she had another $50,000 in losses for medical bills and the value of her car. So if she had good liability, say $150/300/25 (single injury/single accident/property), clearly, Progressive should pay her estate the $50,000 in costs and losses, but what claim does her parents and brother have against the guy who hit her? If they have clear claim that should be worth an easy $150,000, than sure, they should pay, but what is the law in the state she was in?

For a crazy sounding real example, a drunk driver hit and killed a father of 5, who was the sole income for his family. He had low insurance, $30k, and his company kept trying to low ball the widow, offering her $25k, etc. So she sued the guy, won a large settlement, and of course, he doesn’t have it. Now this was in one of the few states that has a rule that if your insurance company dicks around and that costs you, you can sue them and get huge penalties (3x or better, I don’t recall the details now). So the widow traded him his right to sue his insurance company in exchange for dropping the debt, sued the insurance company, and won, and thus got far more than the $30k she would have gotten had they not been jerks.

So, sure, everyone who doesn’t have a real claim loves the insurance company, but when push comes to shove, which ones suck, and which ones are decent? I wish I knew.
Tribune

I wonder if legal fees plus bad PR has surpassed the amount that Progressive owes the family yet?
http://www.avoision.com/ avoision

FYI Progressive says it was Nationwide, not them, that served as the defendant’s attorney. Official statement here:

http://www.progressive.com/understanding-insurance/entries/2012/8/14/statement_on_fisher.aspx

Seems like an incredibly quick response, given their description of the “complex case.” And doesn’t seem to address why the Fisher family believed the defense to have been from Progressive’s legal team.
http://pulse.yahoo.com/_2OL2ASFGRIIXW4PQJS3VEJECXQ M

Sounds like the law in Maryland is the problem.

In many states, once the other driver’s insurance company pays the liability policy limit, your Uninsured Motorist (UM) coverage becomes Under Insured Motorist (UIM) provided those limits EXCEED the liability coverage of the responsible driver.

No suing the other party, you just file your UIM claim against YOUR insurance company after you have proof the negligent party’s liability insurance limits have been exhausted. If your insurance company refuses to pay or makes an offer that is (in your opinion) insufficient, you file arbitration against your insurance company and hope for the best.

If you live in a state that allows first party bad faith and it can be proven the insurance company acted in bad faith by delaying payment, the door is wide open.

And yes, insurance companies are evil. They look for ways to deny coverage, all the while saying, “we are reviewing the policy for coverage” which is code for a way to weasel out with legal language that even their own claims representatives cannot decipher. They rely on their legal counsel but it’s not uncommon for the courts to side with the insured regarding ambiguous language.

Though another aspect to consider: the claims staff is not always properly trained (insurance companies don’t like to spend money to educate their employees as it’s an expense) and the past couple of decades CEO’s have determined that salaried employees can do more without having to pay them to do the work of 2, 3, 4 or 5 employees that were outsourced, downsized or just laid off. Not that the consumer sees a drop in their premium with that approach; just more bonus money for the supervisor, branch/regional manager and CEO. The turnover at an insurance claims office is horrendous and the worker bees have to follow protocol otherwise they risk unemployment. A very sad situation.

If you are able to get a consumer advocate from the local news on your side, it is helpful since bad publicity is not something the insurance company desires.

Though apparently, the moral of the story: don’t live in Maryland.
- Antinous / Moderator
  
  Though apparently, the moral of the story: don’t live in Maryland.
  
  Anyone who’s ever seen any John Waters films probably had that sorted already.
Marc45

Having had direct experience with an insurance company refusing to honor a claim I can see the outrage. I managed to get the claim paid by writing lots of letters, getting a lawyer and being a general pain in the ass. Despite this experience, I can easily see that baring any sort of bad-faith law or PR nightmare, an insurance company’s best business bet is to deny claims unless it’s pretty clear cut. They are in an actuarial business model and it’s all about the odds. (claim cost vs. PR cost, claim cost vs. litigation cost, claim cost vs. jury award, etc.) That’s why states have insurance commissioners and laws governing insurance companies. Rather than be outraged, just get a good lawyer, read your policy and check your insurance company’s claim payout rating. Some are much better than others.
Jason Rihel

Wasn’t something like this the basis of the courtroom twist in The Postman Always Rings Twice?
Chris Goodwin

Uh oh. Flobot is… broken.
http://pulse.yahoo.com/_GJO7JGJFACICMLOKUWREOSWZAE Peter

when can we get rid of cars driven by humans?