Progressive Insurance Policy Dropped without our knowledge until notified by DMV to surrender license for not caring insurance! Nationwide

I purchased a full coverage auto policy for my 25yo daughter living in San Diego.

We applied for the auto policy Aug 23, 2014 and I paid in advance for a full 6 months.

Two weeks later, Progressive says they mailed a letter stating we needed to contact them to verify identity such a martial status and driver education and experience otherwise the policy would be cancelled in 30 days.

We moved mid September and the address was updated online with Progressive. Needless to say, we never recieved the letter. Progressive says they sent a second letter in November confirming they cancelled the auto policy Nov 18; which we never recieved. Mind you, Progressive has our phone number, yet never called us or sent the letter regitered to prove it was recieved.

In the first week of December we received notofication from DMV stating the drivers license must be surrendered and fines must be paid to them after being notified that we no longer carried auto insurance. We still never received notifcation from Progressive.

We called Progressive today to reinstate the policy (and answer their identity questions that the orginal agent failed to ask of us when we applied!). We had to obtain a new quote and what do you know, now the original $119/month policy has gone up to $180/month and nothing in the drivers status has changed since the day we signed up in August.

Progressive states the rate is higher because we have NOT been insured for the past two weeks!? Not to mention we also have to pay fines to DMV for learning from Progressive that they dropped our insurance policy and we are in jeorpardy of being arrested for not having a current license in good standing.

What a racket this company is! I called them and asked to reinstate the policy at the same rate but they simply said you are welcome to seek policies elsewhere. The bad thing is, their new rate is still less than others but its the principle that they can just cancel on you, not inform you correctly and then report you to DMV for no insurance without our knowledge and put you in a double jeopardy situation.

They did refund my credit card 2 weeks ago for the balance I had already paid for the 6 month policy but I have not yet seen that statement in the mail to know they did that.

It seems they should be made to confirm via phone or registered mail to the customer so they know they no longer have insurance when the insurance company cancells for no good reason.