A Tumblr complaining about Progressive has gone viral. The author's sister, "Katie," died in a Maryland car accident; the other driver's insurance paid its limits, and Katie's family went to Katie's insurer, Progressive, to seek coverage for the underinsurance of the other driver. Progressive refused, so the family sued the other driver to prove liability, and found themselves adverse to Progressive in court, and the author was furious, as are readers of the story. (A jury found for Katie, so her family will recover from Progressive after all.)
Without more facts, however, it seems Progressive is being viewed unfairly. Maryland is one of the few remaining contributory negligence states: if Katie was 1% at fault in the accident, there is no liability to the other driver or Progressive. As the author himself admits, there was a "possibility that Katie was at fault in the accident." Is Progressive supposed to give money away when they aren't legally obligated to do so? The author says "One indication that the case was pretty open-and-shut was that the other guy's insurance company looked at the situation and settled with my sister's estate basically immediately." But because "that payment didn't amount to much," that insurance company could have reasonably decided that there was little point in spending the small insurance limits on attorneys instead of just writing a check. Progressive had more money at stake and more reason to defend.
Yes, "[c]arrying Progressive insurance and getting into an accident does not entitle you to the value of your insurance policy." But that's true for all insurance companies when the policy holder is not in a no-fault state. Progressive isn't unique in that regard.
As of 2007, Maryland permits recovery on a "bad faith" theory against insurers who refuse to pay claims where liability is not "fairly debatable." One would expect that Progressive would not have taken the action it did, and risk liability, if their position was not "fairly debatable." (See the entertaining story of Rex DeGeorge for examples of insurance companies being quick to pay when bad faith might be at issue.) The author seems to concede that Progressive's position was fairly debatable; he also makes no mention about further litigation against Progressive for its initial refusal to pay.
One sympathizes with the author for the tragic loss of his sister. But his fury at Progressive is misguided. Katie, and other Maryland drivers, pay as little for auto insurance as they do precisely because insurance companies don't have to immediately pony up when they are not liable. One could ask for different rules, but consumers would be paying for those different rules up front. Related: Consumerist.