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On August 7, 2026, a federal jury in Tulsa returned a $40 million verdict against Progressive Direct Insurance Company in Mary Paulding v. Progressive Direct Insurance Co., No. 4:24-cv-00074 (N.D. Okla.). The award consisted of $20 million in compensatory damages and $20 million in punitive damages. The underlying claim sought $25,000 in underinsured motorist (UIM) benefits. Progressive’s pre-suit offer was $710.
The case has attracted attention for the gap between the requested benefits and the verdict. For insurers and claims professionals, however, the more instructive story appears in the court’s summary judgment opinion, which explains how an insurer with a legitimate defense nevertheless may face a jury trial on bad faith.
The Claim File
The following account draws from U.S. Magistrate Judge Christine D. Little’s July 21, 2026 opinion and order denying Progressive’s motion for summary judgment. At that stage, the court considered the evidence in the light most favorable to Paulding, the party opposing the motion.
Paulding was injured in a March 2022 automobile accident. On August 9, 2022, her pre-suit attorney submitted a demand for UIM benefits to Progressive. Within weeks, the adjuster requested chiropractic records he believed were missing, sent a blank medical authorization even though Paulding maintained that one had accompanied the demand, and requested a recorded statement. On September 1, 2022, Progressive confirmed that the at-fault driver’s insurer had tendered its $25,000 liability limits.
The claim then encountered delays. Despite repeated calls, letters, and a fax from Progressive, Paulding’s counsel took almost five months to schedule the recorded statement. The statement, taken in February 2023, first alerted Progressive to a lost-wage claim. Counsel later submitted a revised demand that included $930.43 in lost wages but did not return the wage verification form Progressive repeatedly requested. Paulding maintained that the supporting wage information had already been provided.
A new adjuster took over in March 2023 and continued requesting medical information and the wage verification form. In July, she also requested a “tentative agreement with the tortfeasor,” approximately 10 months after Progressive had confirmed the liability insurer’s tender.
On July 31, 2023, the adjuster contacted the liability insurer directly and received written confirmation of the tender. The next day, she valued Paulding’s claim at $25,710, excluding lost wages. On August 2, she offered the $710 difference. Paulding did not respond to the offer before filing suit in January 2024.
Why Summary Judgment Failed
Judge Little applied Oklahoma’s two-step framework, as described in Shotts v. GEICO General Insurance Co., 943 F.3d 1304 (10th Cir. 2019). First, the court considers whether a legitimate dispute exists concerning coverage or the claim’s value. If such a dispute exists, the plaintiff must present specific additional evidence of bad faith, such as an unreasonable investigation or unjustified payment delay, to submit the issue to a jury.
Progressive had support for its position at the first step. The court concluded that a reasonable jury could attribute delays to Paulding’s counsel’s failure to respond promptly to requests. It also noted that Paulding had not responded to Progressive’s offer before filing suit.
That did not resolve the motion. The court identified two potential sources of additional evidence supporting a bad faith claim.
The first concerned valuation. In her deposition, the adjuster acknowledged a disc herniation as a permanent injury but had marked “not applicable” when addressing permanency in her evaluation. She also confirmed that she had assigned no value to permanent injury. The court concluded that a jury could find that Progressive had failed to reasonably investigate permanency and had consequently undervalued the claim.
The second concerned timeliness. Under Buzzard v. Farmers Insurance Co., 824 P.2d 1105 (Okla. 1991), an Oklahoma UIM insurer must act promptly to determine what payment is due and may not delay benefits until the liability limits are exhausted.
Paulding presented evidence that the chiropractic records were complete when initially submitted, that Progressive could evaluate the claim without the requested wage form, and that the insurer had already confirmed the liability tender. The court concluded that a jury could question whether those requests justified the delay, particularly because the eventual evaluation relied largely on information available in the original demand.
The court also allowed the punitive damages request to proceed. Separately, although Progressive’s motion sought judgment on the breach of contract claim, it did not develop an argument supporting that request. The court declined to supply one. Paulding later dismissed the contract claim by stipulation before trial, leaving the bad faith tort claim for the jury.
What the Jury Heard
The trial ran from August 4 through August 7, 2026, with liability and punitive damages addressed in separate stages.
According to Paulding’s counsel, the trial evidence showed deficiencies in the adjusters’ understanding of Oklahoma UIM claims and linked claims handling to a companywide profit-sharing program. Those statements represent counsel’s characterization of the evidence, not independent findings in the summary judgment opinion. The jury ultimately found Progressive liable for bad faith and awarded both compensatory and punitive damages.
The punitive award warrants particular attention. Oklahoma’s punitive damages statute, 23 O.S. § 9.1, establishes different categories based on the conduct proven.
Under Category I, an insurer’s reckless disregard of its duty of good faith can support punitive damages up to the greater of $100,000 or the actual damages awarded. Under Category II, intentional and malicious breach of that duty can support an award up to the greatest of $500,000, twice the actual damages, or the increased financial benefit derived from the conduct. Category III permits an award without those statutory limits when additional findings concerning intentional, malicious, and life-threatening conduct are made.
The size of the compensatory award can therefore substantially increase potential punitive exposure under Categories I and II. A $20 million compensatory verdict creates a markedly different damages framework than the $25,000 UIM limit might initially suggest.
Post-Trial Proceedings
Post-trial proceedings remain ongoing. Progressive has challenged the verdict through post-trial motion practice, including a renewed motion for judgment. Accordingly, the verdict should not be treated as the final resolution of the case.
The amount of compensatory damages relative to the underlying benefits claim may become a focus of further proceedings. The verdict illustrates the potential exposure arising from claim-handling disputes, but it does not establish a settled measure of damages for similar claims.
Issues for Insurers to Consider
Although Paulding arose under Oklahoma law, the decision highlights several issues that may arise when claim-handling decisions are later examined in bad faith litigation. The significance of those issues will depend on the applicable jurisdiction, policy language, and the facts of the individual claim.
The View from Pennsylvania and New Jersey
The remedies differ in Pennsylvania and New Jersey, but the importance of timely, well-documented claim handling remains.
Pennsylvania’s bad faith statute, 42 Pa.C.S. § 8371, permits a court to award interest on the claim amount from the date the claim was made at the prime rate plus 3%, punitive damages, and court costs and attorney fees. Statutory bad faith claims are decided by the court rather than a jury. That distinction affects trial dynamics but does not diminish the importance of a clear record supporting the insurer’s decisions.
New Jersey’s Insurance Fair Conduct Act (IFCA), enacted January 18, 2022, provides a private right of action for qualifying UM/UIM claimants who experience unreasonable denial or delay of coverage or benefits. The statute also addresses violations of the unfair insurance practices provisions in N.J.S.A. 17:29B-4.
A successful claimant may recover actual damages caused by the violation, including trial verdicts subject to the statute’s three-times-coverage limitation, along with pre- and post-judgment interest, reasonable attorney fees, and reasonable litigation expenses. Whether particular conduct violates IFCA depends on the facts and applicable law, but the issues raised in Paulding, including disputed document requests and alleged delays, may present different legal consequences under New Jersey law.
The Broader Takeaway
Paulding illustrates how questions about investigation, timing, and valuation can combine to create substantial bad faith exposure. The summary judgment record contained evidence that Paulding’s counsel contributed to delays, but it also raised questions about whether Progressive needed the information it continued requesting and whether its evaluation adequately addressed a documented injury.
Those competing explanations were enough to send the bad faith claim to a jury, which returned a verdict 1,600 times the UIM limit. The decision demonstrates how the claim record can take on significance in subsequent bad faith litigation, especially when the parties dispute what information was necessary, when an evaluation could reasonably have occurred, and how the insurer arrived at its valuation.
For questions about bad faith exposure, coverage disputes, or litigation arising from claim-handling decisions, contact Chartwell’s Insurance Coverage team.
