A.M.F. v. Progressive Classic Insurance, MIA No. 27-1001-2008-00053 (March 4, 2009).
Insurer acted in bad faith by drawing out the claims handling process by making claims adjusters duplicate work, requesting unnecessary exams, refusing to listen to its own staff’s repeated evaluations, and low-balling the insured.
The MIA found that Progressive Classic Insurance acted in bad faith because of its bad claims handling process. Progressive dragged its heels handling the claims, ignoring its own staff’s recommendations to offer policy limits, ordering needless additional reviews of the records, and constantly reevaluating work it had already. It was not the amount of time that the MIA noticed, but the intention to avoid paying the claim.
Plaintiff sustained injuries in a four-car crash on the Baltimore Beltway on the evening October 24, 2007. The responsible party was an uninsured motorist. (Op. 5). She suffered neck pain, lower back pain, leg pain, and body aches. Her condition became chronic and she ran up $8,992 in medicals. (Op. 8.)
Plaintiff made a demand for $20,000. Progressive’s adjuster, Mr. Brownstein, initially valued the claim somewhere between $7,970 and $13,570 with pain and suffering between $2500 and $8100. He asked for authority for $15,970. His bosses told him to reevaluate the claim before the end of the day by “downcoding” some charges and investigating a 2007 traffic accident involving the Plaintiff. Mr. Brownstein’s predecessor, Mr. Taylor, had already investigated the traffic accident. (Op. 10).
Mr. Brownstein reevaluated the claim to a low of $7,381 and a high of $10,881. He asked for authorization for $10,881 and received it. (Op. 10.)
Progressive then reassigned the case to Ms. Kim and told her to review to evaluation, including coverage and liability. Ms. Kim’s predecessors had investigated both liability and coverage. Ms. Kim recommended tendering policy limits. (Op. 10-11.) Her bosses denied her recommendation and directed her to get more medical records and a peer review of the records to determine whether Plaintiff’s injuries were degenerative or related to the accident. (Op. 11.) The report was inconclusive and the medical records provided no insights.
Ms. Kim got the report back and offered $10,400. Plaintiff declined and repeated their demand for policy limits. Ms. Kim upped her offer to $12,000. Plaintiff countered with $18,000 and sent the case to an expert. (Op. 12.)
Progressive subsequently increased Ms. Kim’s authorization to somewhere between $12,727 and $16,227. After seeing a new MRI Bill, Ms. Kim sought and received authorization for $17,433. Ms. Kim offered $16,000. Plaintiff responded with $19,000. Negotiations broke down and litigation ensued. (Op. 13.)
The MIA found that while “no single factor… demonstrates an absence of good faith[,]…. The record as a whole leads to the conclusion that Progressive’s goal was to avoid paying its policy limits” despite the nearly $9000 in medicals and a permanent deteriorating injury. (Op. 14). In short, the MIA felt that Progressive was low-balling its insured.
The MIA felt the medical record showed that the claim was worth policy limits. Both Mr. Brownstein and Mr. Kim had “independently valued the claim at or near policy limits.” But Progressive rejected its own adjuster’s opinions and told them calculate in factors prior adjusters had already calculated. (Op. 16.) Progressive also lowered its estimates by “downcoding” Plaintiff’s injuries based on gross misreading and misrepresentations of the medical record. (Op. 16-17.)
Progressive’s peer review doctor also failed to do a good job. Part of this, perhaps, was because Progressive did not even provide its peer review doctor with accurate facts. The resulting peer review report contained “internal inconsistencies” and lacked factual support for its conclusions. (Op. 17-18.)
The MIA also felt that Progressive “lacked diligence in handling this claim.” (Op. 18.) Progressive started dragging its heels once it became clear that Plaintiff had legitimate expenses and a permanent injury, and Progressive’s peer review did not contradict causation. Progressive had its adjustors do tasks in duplicate and triplicate by having each new adjuster reevaluate work done by prior adjusters. The MIA was not upset by “the overall time it took to adjust claim.” Rather, it was “the intent reflected in the record to delay the process. (Op. 19.)