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Florida appeals court keeps Progressive UM/UIM coverage after no-consent settlement
The court said Progressive could not rescind a $500,000 uninsured/underinsured motorist policy because the policyholder did not prove the insurer was actually prejudiced.
Progressive failed to void a $500,000 uninsured/underinsured motorist auto policy after its customer settled a claim without the insurer's consent, according to a decision from Florida's Fourth District Court of Appeal on September 9, 2026.
The dispute stemmed from a crash on April 30, 2022. The at-fault driver carried $10,000 in liability coverage through Liberty Mutual, while Progressive's policyholder held UM/UIM coverage that applies when the at-fault driver cannot fully cover damages.
Before suing Progressive, the policyholder signed a release, took the $10,000 from Liberty Mutual, and closed out that portion of the case without seeking Progressive's sign-off as required under the policy and Florida law.
Under section 627.727 of the Florida Statutes, the injured driver must give notice of a proposed settlement to underinsured motorist insurers, and the insurer then has 30 days to approve the settlement or preserve its subrogation rights. The appeals court ruled that coverage is only lost when the insurer is prejudiced, and it relied on trial evidence that focused on the at-fault driver's finances to address the prejudice presumption, Insurance Business reported.