This story is really terrible, and completely believable.
My Sister Paid Progressive Insurance to Defend Her...
Summary : Girl with progressive insurance dies in auto accident with fellow without sufficient insurance, and instead of paying the difference, Progressive forces the family to sue the guy and then defends him in court hoping they won't have to pay.
All insurance companies do this, however - it is not in their best interest to ever pay out any amount that would be more than the legal fees of fighting it.