The Attempted Fix

New attorneys caught the error after the fact and tried to undo it, writing to Progressive to request a waiver of its subrogation rights and sending Liberty Mutual a $10,000 check to reverse the payout. The policyholder then sued Progressive for his underinsured motorist benefits. Progressive pushed back hard, arguing the unauthorized settlement had breached the policy and asking the court to void the coverage entirely.

Why the Coverage Survived Anyway

Here's the part worth understanding closely, because it's the crux of the entire ruling. Under Florida law, settling without your UM/UIM insurer's permission doesn't automatically void your coverage. It only voids coverage if the insurer can show the unauthorized settlement actually harmed them. Courts start by presuming the insurer was harmed, but the policyholder can overcome that presumption, and one way to do it is by showing the at-fault driver was essentially not worth pursuing in the first place.

That's exactly what played out here. The trial court examined the at-fault driver's finances and found she ran a small business earning around $20,000 a year, carried a mortgage, and had already spent an earlier injury settlement. In other words, she was, in the court's words, of "apparent and probable insolvency." If Progressive had been asked for permission upfront, chasing this particular driver for reimbursement would have cost more in legal fees than it could have ever recovered. No real financial loss to Progressive meant no real prejudice, and the appeals court agreed the trial judge's finding was a reasonable one to reach on that evidence.

What This Doesn't Mean

It's worth being clear about the limits of this ruling. The court didn't hand the policyholder any money. This was a partial judgment that only keeps his UM/UIM coverage alive; the actual size of his injury claim, covering negligence, causation, and damages, still has to be decided at a separate trial. The decision also isn't final until the court rules on any pending motion for rehearing.

What This Means If You're Ever in This Situation

The single most important takeaway here is not "you can skip the consent step and still be fine." It's the opposite: this policyholder came dangerously close to losing $500,000 in coverage over a step that's easy to overlook in the aftermath of a crash, when you're mostly focused on getting compensated for your injuries as quickly as possible. He was fortunate that the at-fault driver's financial situation happened to work in his favor after the fact. Most people in this position won't know in the moment whether skipping that notification will be harmless or catastrophic.

If you carry UM/UIM coverage and the at-fault driver's insurance isn't enough to cover your damages, notify your own insurer in writing before you sign any settlement or release with the other driver's insurer. Florida law specifically requires written notice by certified or registered mail, giving your UM/UIM carrier 30 days to either approve the settlement or preserve its subrogation rights. Skipping this step doesn't automatically doom your claim, as this case shows, but it puts your own coverage at risk over a factor, the at-fault driver's finances, that you may not be able to predict or control.

If you've been hit by an underinsured driver and are navigating a UM/UIM claim, the independent attorneys we connect you with can help you avoid costly missteps like this one and pursue the full compensation your policy provides.

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