Progressive insurance on defense after court case (AP)

When Matt Fisher’s initial Tumblr post about this whole story came out and several of my friends were tweeting about it, it really upset me. My reaction was complicated by the fact that not only am I a customer of Progressive Insurance, and one of my friends work for the company, but I’ve written repeatedly about my girlcrush on Flo. (She’s basically a geeky Bettie Page, so it’s hard not to crush on her.) Even now that this case has been settled, I’m still giving serious thought to moving to another insurer once my Progressive policy expires at the beginning of next year, because I still have a bad taste in my mouth from how Progressive handled some aspects of this case.

I want to give Progressive at least some benefit of the doubt; much was made of their repeated, cold-sounding responses to people who tweeted their outrage at the company, but as the company was engaged in litigation at the time, that’s somewhat understandable because lawsuits often hinder the ability of individuals or corporations to speak freely because what they tell others could enter their current legal cases. That said, the fact that they didn’t change their Twitter avatar– Flo’s smiling face — before making so many of those somber tweets was just plain wrong. I follow Progressive’s Twitter account, and they often have to make serious tweets about things like how customers impacted by big storms can get hold of them, or consoling customers who’ve had bad experiences with them (and, in some cases, canceled their policies), so having Flo as their avatar had been a bad idea long before the Fisher tragedy and the resulting social media firestorm. I don’t understand why they didn’t change it earlier.

As some have pointed out, those of us watching this case from the outside only have a partial picture of all the forces at work here. I haven’t exactly had much interaction with either Progressive or my previous insurer; the closest thing I’ve had to an auto accident was getting some paint scraped off my rear bumper in a parking lot one time. That said, my political beliefs and my experiences with large corporations do make me have an initial distrust of insurance companies. Perhaps this isn’t so fair with auto insurers, but I’ve known far too many people who’ve been screwed over by health insurers to not have strongly negative feelings about the insurance industry as a whole, even though I have personally never had a problem with any insurance companies I’ve interacted with.

The fact that so many insurance regulations get decided on a state-by-state basis, as the Fisher case has illuminated, seems incredibly problematic, and I live in a part of the country where these discrepancies are felt the most. If I moved just three miles to the north of where I live now, just across the state line into Michigan, my auto insurance rates would almost double. This is because Michigan does not place a cap on the amount that insurers have to pay as the result of a “no fault” accident, although I believe the state has a special fund to pay for anything in excess of $3 million per person or case. Despite the high cost of auto insurance in Michigan, though, voters there rejected ballot measures to place caps on no-fault insurance in the 1990s, and the caps are only in danger now because Michigan Republicans have been so active since they swept to power in the 2010 elections. (For more reading I encourage you to visit the site of CPAN, the Coalition to Protect Auto No-Fault.) As much as I like not having a huge auto insurance bill, philosophically I strongly disagree with the idea of capping insurance benefits because of the potentially disastrous consequences this could result in for accident victims, and this goes not just for auto insurance but for other kinds of insurance as well.

Although most business models have a potential for abuse when companies go too far in trying to maximize profits at the jeopardy of their consumers, the insurance industry model is one that seems particularly fraught with such possibilities. This is hardly a new observation — it’s the subject of one of the more famous Monty Python’s Flying Circus sketches the troupe did –but like so many things these days, what seemed hilarious decades ago, because it was so absurd to think about, doesn’t seem so funny any longer because it’s a little too close to the truth. When insurance companies act poorly, as Progressive did in the Fisher case, of course we should talk about what happened and deride the companies, but what happened to the idea of us getting together and deciding on guidelines for companies and individuals to make sure that things like this don’t happen, or at least don’t happen so frequently? We used to have something to help us handle that. It was called government.

Even though I grew up in the eighties, there was still a long period of my life in which the idea that government should set regulations on business activity to protect its citizens was not controversial. Yes, I’ve lived my life in a period of increasing deregulation, but most of that time the argument from the right was just that government regulation had gone too far. Al Gore pointing to the ten pages of regulations on government ashtrays at the start of his tenure as Vice President was certainly a shining example of how regulation, no matter how well-intended, can be taken to absurdity. In the Tea Party era of American politics, though, more and more right-wingers are putting out the message that any government regulation is bad, and that the free market alone should decide what is and is not good for American consumers, and to believe otherwise is socialist thinking.

The health care debate of recent years is a perfect example of how right-wingers frame an argument to get their base riled up. Even at the zenith of Republican popularity during the Bush 43 presidency the health insurance companies still had a fairly negative rating, so Republicans didn’t do too much (overtly) to help them. Health insurance CEOs have never made for sympathetic figures, and most (outside of CNBC junkies) probably don’t consider CEOs the most telegenic people. Since they can’t put health insurers up on a pedestal, the right instead doubled down (at least) on anti-government rhetoric, making Democrats out to be the greater of two evils. Judging by how public opinion shifted on health care reform these past four years, it was a very effective tactic.

Legal issues in general are another one of those areas where right-wingers have been very effective at creating a dominant narrative that overshadows the problems of their philosophy. For all the disgusting things that some companies have done in courts in my lifetime, the story of Stella Liebeck, the “McDonald’s Hot Coffee Lady,” seems to be much more prevalent in American culture. When you read the details of the story you see how the myths that have built up around this incident are ridiculous, and how more than anything it’s actually an example of a big company spending absurd amounts of money to keep sending a case back to court to get out of a judgment that was a trifling sum of money compared to their annual profits. Liebeck’s original suit was just for $20,000, to cover medical expenses after she suffered third-degree burns to six percent of her body, but everyone focuses on the $2.7 million in punitive damages a jury eventually awarded Liebeck after a string of court actions far more ludicrous than that jury’s rulings. The judge lowered the punitive damages to less than half a million dollars, and even after that Liebeck and McDonald’s settled for an amount that was presumably less, but the myth of “the woman who got a billion dollars from McDonald’s for spilling coffee on herself” persists in our culture, and is held up by many on the right as an example of how people try to “swindle” corporations out of billions of dollars and why we need caps on how much money people can sue companies for, regardless of how much the companies might have hurt them.

This narrative has played out even more in the past ten years; when John Edwards ran for Vice President in 2004, much was made of his legal background and how he was one of “those tort lawyers” who sued corporations for unreasonable sums of money for undeserving plaintiffs. The year after that election, President Bush and Republicans in Congress passed legal reforms that made it much harder for people to get bankruptcy protection. After the economic collapse of 2008  too many Americans, who might have been able to retain at least some of their assets as we spiraled into a long and deep recession, instead lost what they owned since it was much easier for banks — the same ones who got us into the whole mess — to seize people’s assets. Hardly anyone talks about the bankruptcy reform of 2005 and its role in the very human tragedies it’s caused since it was signed into law, though, and the initial wave of anger towards the banks in 2008 and 2009 has long since faded from the American consciousness. You probably don’t have a positive mental image in your head when you think of bank lawyers, but they’re hardly as demonized in our culture as tort lawyers for consumers are.

For all that Progressive acted badly in the Fisher case, it’s all too telling that I haven’t seen anyone use it as a rallying cry to revisit regulations for insurance companies. This isn’t to say that there’s no value in personal action against Progressive, something I may very well do in a few months myself, but it feels like we don’t even consider the possibility of lobbying the government to prevent corporate malfeasance via regulations any longer. President Obama did run on increased regulations in 2008, and he got some new regulations passed, but increased regulation isn’t exactly a big part of his campaign this year. (Since Progressive historically donates a lot to Democrats, and the Democratic Party needs all the money it can get this year, I doubt the Fisher case will become a talking point for any Democrat running for office.)

I still believe in the idea of a government that crafts and enforces rules and regulations to make sure corporations don’t victimize people. Twenty years ago this would not have been a big deal. Today, in the eyes of far too many people, it makes me a socialist.