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Progressive demands “7 verifiable proofs” to avoid paying legitimate claim

November 4, 2013 by Steven M. Gursten

Has Progressive insurance lied to you also about your No Fault insurance rights?


Insurance companies aren’t supposed to make up the rules as they go – especially when doing so can cause tremendous hardship to accident victims. Unfortunately, that’s exactly what Progressive Michigan Insurance Company has been doing.

Take one recent example based on how a Michigan Auto Law client’s claim for No Fault wage loss benefits was being handled by the auto insurer.

Hey Flo, you aren’t supposed to treat people this way.

Progressive recently informed a client of Michigan Auto Law partner Leonard Koltonow in an August 5, 2013, letter that it was willing to pay wage loss…if certain conditions were met.

The problem was with these “conditions.” And keep in mind that Progressive was demanding this from their own insured/customer who had spent money to receive these benefits if she were one day injured in an auto accident and too hurt to be able to work.

These conditions went so beyond Progressive’s legal obligation and contractual duty to pay under the Michigan No Fault Law, that they were in fact being used as way to avoid meeting Progressive’s contractual obligation to its own customer.

Progressive’s letter contained  lies and fabrications

First, Progressive dreamed up a fictional requirement that is found nowhere in Michigan’s No Fault Law:

Wage loss claimants must provide “[s]even (7) verifiable proofs of actively-seeking employment for each week following … release to return to work.”Seven verifiable proofs of actively seeking employment?

I’ve been a No Fault insurance lawyer practicing in Michigan for nearly 20 years.  I’ve written a book on No Fault and regularly educate other lawyers and judges on the insurance laws at legal seminars around the state.  There is no requirement to provide seven verifiable proofs found anywhere in the Michigan No Fault law. This was completely made-up out of thin air.

Second, as support for its first made-up claim, Progressive cited a statute, “MCLA 500.3107(b)(1)(j),” insisting that this  statute “require[d] an injured person [who is claiming No Fault wage loss benefits] to seek alternate employment and mitigate their damages.”

It didn’t. It doesn’t exist.

Third, Progressive ran its bogus scheme to its illogical conclusion by warning that “[a]ll submitted proofs are subject to independent verification with the employer in question in order to issue wage loss reimbursement.”

The law in Michigan merely requires reasonable proof be provided so wage loss can be paid in a prompt and expeditious manner.

What does Michigan law require a claimant provide in order to recover No Fault Wage Loss?

The law in Michigan requires an insurer to pay No Fault benefits “within 30 days” of receiving “reasonable proof” of the benefits owed or risk be sanctioned with paying penalty interest and attorney fees on the unpaid and “overdue” benefits. (See MCL 500.3142 and 500.3148)

How to protect yourself: Tell the insurance commissioner that you’ve been lied to

It will be interesting to see how Michigan’s new insurance commissioner deals with this.  The former Insurance Commissioner R. Kevin Clinton, who was until recently director of the Michigan Department of Insurance and Financial Services (DIFS), has been an outspoken proponent of clamping down on auto insurance fraud.

Sadly, many (including myself) felt that Clinton, who ran a major insurance company before being appointed to the job, was only concerned with the fraud by people against insurance companies.

It will be interesting to see how the Department of Insurance and Financial Services deals with a flagrant case of an insurance company committing  fraud against its own customer, as Progressive Insurance was perpetuating on our  client.

You should consider filing a complaint with the Department of Insurance and Financial Services (DIFS)’s Consumer Services if any of the following circumstances exist:

  • If you’ve been lied to by Progressive Michigan Insurance Company.
  • If you otherwise had your No Fault benefits fraudulently denied.
  • If your insurance company has created “extraordinary legal requirements” before they will pay a due and owing claim.

Click here for the link to file a complaint.

Related information:

Progressive Insurance: The Worthless Coverage award

Attorney picks for the 7 worst auto insurance companies in Michigan

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