Progressive insurance company action legality? Scam? New mexico

Location: new mexico usa.
So, my family uses progressive auto insurance. My paternal grandmother is covered under her own plan that is paid for by us.. My aunt has her own plan she pays for, 3 separate plans. My cousin got his license, and apparently progressive has a system where they get a notification from the dmv for any new licenses issued at any address connected to them. Progressive saw that he was just registered and did not have insurance, so they immediately went to the homeowners account ( my grandma, not my aunt ) and added him to it automatically. Without any consent to do so from the account owner or the account financiers. They claim that they sent an exclusion form for my cousin to be dismissed from the account 1 time. That we did not receive. They sent 1 message. No follow-up. No texts, no calls. 1 email. We ended up getting billed 500$ for! this which overdrafted the account costing us even more. We called, and they blamed us for not responding to their automatic system notification. We, of course, were outraged and fought against it. But they didn’t budge. They said we will send the form paper wise, but we will not return the 500$. Instead, we will get company credit that will go towards the next 3 payments. We had to pull from savings to pay for it. So, I am just baffled by how this is possibly legal. This is in my mind and my familes mind, a disgusting money steal by a big company to a family that can not afford to fight back. Do I have any options other than to suck it up?