Item 1.01 Entry into a Material Definitive Agreement.

On December 31, 2008, The Progressive Corporation (the "Company") entered into a 364-Day Secured Liquidity Credit Facility Agreement (the "Credit Agreement") with National City Bank ("NCB") in the principal amount of $125 million (which amount may be increased at the Company's request, but subject to NCB's discretion, up to a maximum aggregate principal amount of $150 million) (the "Line of Credit"). The Line of Credit has been established to provide the Company with access to funds in the event of a disruption in the Company's normal cash management or treasury operations, or in any of the systems or facilities that support such operations, including a disruption in the country's or the world's financial markets.

Subject to the terms and conditions of the Credit Agreement, the Company may borrow funds thereunder, on a revolving basis, either in the form of Base Rate Loans or Eurodollar Loans. (All capitalized terms used in this description and not defined herein have the meanings contained in the Credit Agreement.) Base Rate Loans will bear interest at a daily rate of interest equal to the greater of (i) NCB's prime rate, (ii) the Federal Funds Effective Rate plus 1/2 of 1% per annum, and (iii) the one month Adjusted Eurodollar Rate plus 2% per annum. Eurodollar Loans will bear interest at an Adjusted Eurodollar Rate, which is determined based on the one, two, three or six month LIBOR Rate (as selected by the Company), plus 25 basis points, for the duration of the period selected. All borrowings under the Line of Credit will be secured by the Company's pledge of certain securities that are directly issued or fully guaranteed by the United States of America. The Company will pay a one-time facility fee in the amount of $12,500. The Line of Credit will expire on the earlier to occur of 364 days from the Closing Date or December 31, 2009, or upon the occurrence of certain other events as described in the Credit Agreement. A copy of the Credit Agreement is attached hereto as Exhibit 4.1.

Item 1.02 Termination of a Material Definitive Agreement.

The Credit Agreement replaced the Commercial Note: Demand Line of Credit dated December 13, 2005, with NCB, which had been previously reported by the Company on a Form 8-K dated December 13, 2005.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

See exhibit index on page 4.

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