A Florida policyholder is suing Progressive, saying it refused to pay an underinsured motorist claim after a binding arbitration determined her damages to be $200,000.
The complaint, filed July 27, 2026 in the US District Court for the Southern District of Florida, raises a question that matters to claims professionals: is an underinsured motorist carrier bound by an arbitration it did not attend?
According to the filing, the policyholder was a passenger in a pickup truck on February 15, 2025 when a van ran a stop sign and struck it. The complaint says the crash led to one wrongful death claim and twelve personal injury claims against just two liability policies.
The complaint puts the available coverage at $4 million - $500,000 in primary coverage and $3 million in excess behind the at-fault driver, plus $500,000 behind the truck - which the filing says was not enough to cover all the claims.
That, the complaint says, moved the case into Florida's limited-coverage process under Section 624.155(6). When competing claims exceed policy limits, the statute lets an insurer resolve them through an interpleader action or a binding arbitration, with each claimant taking a prorated share. The filing notes that insurers "convinced the legislature to enact" that scheme.
Mediation failed, according to the complaint, and a binding arbitration was held on July 16, 2025. The filing says the arbitrator determined the policyholder's personal injury damages to be $200,000. But because total damages across all claimants exceeded the available coverage, each claimant recovered only 33.55%. The policyholder's share came to $67,348.27, a reduction of $132,651.73.
She then turned to her own coverage. The complaint says she was a named insured on her parents' Progressive policy, which provided uninsured motor vehicle coverage of up to $200,000 per insured. That coverage, as quoted in the filing, treats a vehicle as underinsured when its "bodily injury liability bond or policy applies at the time of the accident, but its limit of liability for bodily injury is less than the bodily injury damages an insured person is legally entitled to recover." On October 21, 2025, the complaint says, she demanded the $132,651.73 gap.
Progressive did not pay it, according to the filing. The complaint says the carrier asked for medical records, itemized bills and a PIP log, and then, in January 2026, offered $2,000, stating she was "overcompensated by the amount she received from the arbitration." The filing says Progressive had earlier taken the position that it "was not invited to attend the binding arbitration" and "was not a party to the arbitration and is not bound by any of the results."
The complaint argues that allowing a UM carrier to reopen a binding arbitration would not only reduce the policyholder's recovery but also disturb the arbitrator's damages findings for every other claimant, and with them the limited-coverage structure the filing says insurers "convinced the legislature to enact." It brings one count for breach of the underinsured motorist contract and one for statutory bad faith, and states that a Civil Remedy Notice was filed with the Florida Department of Financial Services on May 4, 2026.
None of these allegations have been tested, and no court has ruled on any of the claims.
