Progressive Insurance has one of the most visible advertising campaigns in the U.S. and promotes themselves as a top-notch insurance company committed to customer service at the highest level. But in the real world, Progressive sometimes employs a strategy that leaves its customers high and dry when they get sued.
We are handling a case against a Progressive customer. Progressive sold this young man a motorcycle policy with coverage of $20,000 for any personal injury claims made against him. This customer lost control of his motorcycle, and our client, who was a passenger on the motorcycle, was badly injured in the crash.
We filed suit against the operator of the motorcycle on behalf of our client. Normally, an insurance company would then hire a lawyer to defend the lawsuit against its customer. But not Progressive, at least not in this case. Instead, Progressive took advantage of a provision in its policy which allows it to refuse to hire a lawyer to defend their customer, so long as Progressive deposits the $20,000 with the court where the lawsuit is pending, to be applied to any verdict that the jury awards in the case.
The customer is left with two bad choices: either defend the lawsuit himself without a lawyer, or hire a lawyer and pay out of his own pocket for the lawyer to defend the case. In our case, the Progressive customer is also exposed to significant potential liability, which could run into hundreds of thousands of dollars.
What Progressive is doing here is not illegal – the insurance policy as written by Progressive gives them the right to do this. But it is probably not what Progressive customers expect when they buy a policy from Progressive.
- Paul Johnson, Esq.