Are There Penalties For Canceling Progressive Auto Insurance?

(This carefully researched, thoughtful advice is from a real person. Posts may contain affiliate links.)

If you plan to cancel your Progressive auto insurance, don’t necessarily expect a refund for the unused portion of your insurance or for your last installment payment. The company may try to find a way to keep all of what you’ve paid whether you’re due a refund or not.

In my case, my premiums were about $80 per month and had been for years. That’s a good price, but I got a price of $52 per month from a competing company. It’s only for a six-month policy, however, but I knew I could return to Progressive in the future if I decide the new insurance wasn’t such a good deal later on.

Now, however, I won’t be using Progressive again because of their decision to keep my final month’s premium without telling me what they were doing until I started questioning them.

My Progressive Cancellation Horror Story

Perhaps horror story is too strong a phrase, but I believe I was cheated by Progressive. I canceled my policy near the end of the third month of a year-long policy after many, many years of doing business with them and only ever having a couple of small claims years ago.

I canceled on October 30 after paying the most recent premium payment electronically on October 22. So I should be due back for at least three weeks of unused insurance, right? Not according to several representatives I contacted over a two-day period. They charge a $65 “setup” fee — that’s what they call it — to cancel the policy and some other fees that they did not itemize. Interestingly, that’s about equal to what they owed me back, but they also said some other fees were added meaning I had a balance due for canceling of about $6. As a courtesy, they said they were willing to waive the $6 balance I owed.

What? I have to pay to set up a cancellation? The policy is clear that canceling is allowed anytime, so how could they do this?

I still don’t know. I’ve filled a complaint with my state’s department of insurance to have them look into this matter, and I expect an eventual positive resolution. But we’ll see. I just don’t think that charging fees that happen to be about the amount I’m due to be refunded is very ethical. And I have made my position clear to state regulators.

Perhaps It’s Too Late For You

If you’re considering doing business with Progressive, I recommend you look elsewhere. If this $65 fee they’re charging me now is the so-called “policy fee”, as some sources have suggested, that’s a pretty steep fee. My new policy with another company that I arranged with the help of a friendly and professional agent — something I didn’t have with Progressive — only involved a $30 policy fee that was paid in advance.

But if you’re reading this article about canceling Progressive auto insurance, it’s probably already too late for you. You’re probably already a customer and considering canceling. In that case, all you can do is wait until your policy ends rather than canceling in the middle of a policy. And you can take yourself off of any auto-payment programs so they can’t take money you don’t owe.

In my case, I changed away from Progressive to save substantially on my house insurance with a multi-policy discount from the other company, and the house insurance was due to renew at a high rate if I didn’t make the changes, so I had no choice on the timing.

You may not be able to avoid being taken advantage of by Progressive, but if you can take action to avoid being subjected to hefty fake cancellation fees, please do. You don’t want to lose money as I have.

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