The Progressive Corporation is one of the largest insurance companies in the U.S. According to the Insurance Information Institute, Progressive is the leading company in commercial auto insurance with a market share of 16.2%. Also, the company ranks in the third position in property insurance with a market share of 6.1%.
Even though Progressive leads in auto insurance, there are other companies in this business with 83.8% market share. Therefore, it’s possible to change from one company to another based on various factors. While shopping for new insurance, you may come across one with cheaper rates and decide to cancel your current policy. So how do you cancel progressive insurance? Here’s how.
Why Cancel an Insurance Policy?
Image via Flickr by Marco Verch Professional
Your rates may have increased during your policy term. The only reason why rates change mid-term is when you change information in your policy. Progressive makes it possible for you to change your policy information before the renewal date. You can log in to your account and change the number of drivers or cars. You can also change your address or other information that affects your risk.
These changes can either increase or decrease your rate. If they increase your rate significantly, you may feel the need to cancel the policy. However, having an accident or violation of traffic rules won’t affect your rates in mid-policy.
If you find another insurance company with lower rates, you may consider shifting to the new company. If you’re moving to a new location, you may have to cancel the old policy since premiums change depending on the region. You may cancel your policy if you sell your car, but if you buy a new one immediately, you can keep the policy after making a few changes.
How to Cancel Progressive Insurance
You can cancel your Progressive insurance policy any time, even if it’s new. Although you’re allowed to make changes to your policy online, you can’t cancel your policy that way. You can only cancel it through a phone call, mail, or email.
The company recommends calling their customer care at 1-800-776-4737. Unlike emails, a phone call enables you to ask questions and get immediate feedback.
During the cancellation process, you’ll need to provide information such as:
- Your name and policy number
- Reason for cancellation
- The effective date of your cancellation
After cancellation, the company will determine whether you’re eligible for a refund. If you pay on a month-to-month basis, you may get a small refund if you paid in advance and canceled your policy mid-month.
If you cancel mid-month before paying for that month, you’ll owe money to the company based on the number of days the policy was active. The amount of refund you get depends on how many months you paid in advance and the cancellation method.
The Progressive computer system generates the cancel method automatically, depending on the reason for canceling. These methods help calculate the amount of refund you’ll get for any premiums paid in advance. They include:
- 90% prorate
- Short rate
Under this method, Progressive earns a premium based on a flat daily rate. They get the daily rate by dividing the total premium paid by the number of days in the policy term. Then they multiply the daily rate by the number of days from the effective date to the cancellation date. This amount is the premium the company has earned, and the balance is the unearned premium that you get as a refund.
This method calculates your refund in the same way as the prorate method. However, instead of refunding all the unearned premiums, the company gives 90%. The reasoning behind this is that the company processed the policy expecting it to run the full term.
In this method, the rate of calculating earned and unearned premium isn’t constant. It allows the company to gain higher premiums at the beginning of the policy. They divide this premium into two categories: the period before cancellation and the period after cancellation. They’ll earn the whole amount during the active period and a small percentage of the inactive period.
Is There a Cancellation Fee?
Most people hesitate to cancel their policies due to the fear of paying high cancellation charges. If early cancellation costs more, it may not be worth it. Luckily, Progressive doesn’t charge cancellation fees if you’ve renewed the policy before. However, if it’s your first term, you’ll pay a $50 cancellation fee.
Payment of the cancellation fee may depend on your state and the reason for cancellation. So it’s best to check with your broker before deciding to cancel early.
What to Consider Before Cancellation
Canceling your car’s insurance policy may cost you. So it’s best to calculate what you’ll gain or lose if you cancel the policy. Keep in mind that you can’t drive legally without liability insurance.
Even if you can drive without comprehensive and collision insurance, having insurance gaps can create problems. You’ll be liable for anything that happens during that gap. So, ensure the new policy is in place before canceling the old one.
If you have a few months remaining before the current policy expires, you may not see the need to cancel. It might be better to wait until the policy expires. If you cancel three months or less before the term ends, you will save little or incur an unnecessary loss.
Steps to Cancel Your Policy
You can cancel your Progressive insurance policy at any time by following these steps:
- Call the customer service at 1-800-776-4737.
- Give details to verify you’re the real policy owner.
- Specify the effective day of the cancellation.
- Ask for refunds if you had paid premiums in advance.
In most cases, you won’t get 100% of the unused premium. The amount you get depends on the reason for your cancellation, which will determine the computation method. The company will retain 10% of the unused premium they owe you. If you provide all the necessary information, the cancellation may become effective immediately or at a fixed future date.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.