Who carries the cost of insurance frivolity?
Katie Fisher purchased uninsured motorist protection from Progressive Insurance Company. In 2010, a driver ran a red light and hit Katie’s car while she was crossing an intersection killing Katie. The driver of the other vehicle was underinsured, so the family made a claim to Progressive for the uninsured motorist portion of her policy. Progressive denied the claim stating that Katie was at fault for the accident and defended the driver who ran the red light. Outraged, the family blogged about Progressive’s callous denial of an obvious claim. The blog went viral on the Internet, and eventually Progressive caved and paid the policy limits.
This is not unusual. As a plaintiff’s attorney, I come across claims like Katie’s all the time. It makes me wonder why we pay for insurance in the first place. The major insurance companies fight every claim notwithstanding the facts. They argue about medical expenses; they blame the policy holder for the accident in the face of contrary facts; and their deny-delay- and -refuse- to-pay tactics clog the courthouse dockets.
Sadly, the insurance industry has a very strong lobby and a friend with the tort reformers. Injured plaintiffs who have legitimate cases have to fight an uphill battle against the notion that all claims are frivolous and that the insurance companies will have to pay for bad claims driving up the cost of insurance. Not true. The cost of insurance is a direct result of the carriers’ failure to deal in good faith. They pay their attorneys to fight legitimate cases and end up paying anyway. Who carries the cost of this frivolity? The consumer. Next time you hear a shill for the insurance industry complain about frivolous lawsuits, remember Katie Fisher.