Will Progressive Auto Insurance Raise Your Rates for No Reason?

Written by James Hirby and Fact Checked by The Law Dictionary Staff  

If you're a Progressive Auto Insurance customer, you've probably wondered about your provider's pricing policies. Your curiosity isn't misplaced: Auto insurance pricing is an opaque, confusing and often frustrating practice. This is primarily due to the industry's competitiveness. Since the actuarial equations that determine auto insurance prices may vary slightly between providers, they're often treated as "trade secrets" and guarded accordingly. It's exceedingly rare for auto insurance companies to divulge any specific information about their pricing methodologies. When providers raise their rates, they often do so without giving any explanation for the change.

Unfortunately, Progressive Auto Insurance is known for raising its rates on unsuspecting long-term customers. In many cases, these rate increases come without warning and can't be tied to any specific incidents. This is due to several interconnected factors. While it's important to note that Progressive is a top-rated insurance company that's renowned for its attentive customer service department and lightning-fast claims adjusters, its tendency to raise its rates without warning counts as a serious drawback.

First, Progressive reviews all of its policies at six-month intervals. This is relatively uncommon: Most auto insurance companies review their policies once per year. Some providers may even conduct semi-annual reviews on "loyal" customers who have carried the same policy for five years or more. Unfortunately, this isn't the case with Progressive.

In practice, the six-month review period allows Progressive to recalculate its premiums twice per year. If you're involved in a traffic stop or accident during the six months that precede your policy's bi-annual review, Progressive will make a note of the incident and raise your rates accordingly. Most traffic citations will result in a premium increase of at least 25 percent.

What's more, each six-month policy review involves a comprehensive credit check. If you've sustained any dings to your credit rating during the preceding six months, Progressive will undoubtedly raise the cost of your policy. Such "dings" might involve late credit card or mortgage payments, the closure or cancellation of multiple bank accounts, or the loss of your home to foreclosure or bankruptcy.

These credit-related premium increases are particularly difficult to understand. Unfortunately, they're also perfectly legal. Since individuals with poor credit present a greater statistical likelihood of delinquency, auto insurance providers tend to be wary of them. Even if your score is still relatively high, its trend line is important. If Progressive believes that your credit score is steadily worsening, it's liable to raise your rates. While there will technically be a "reason" for this increase, it might still seem unfair.

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