Some policies are renewed automatically if they're not affirmatively cancelled by the policyholder. I'm pretty sure you'd be complaining about the opposite result if they didn't renew your policy and you had no coverage and got into an accident and needed the coverage.
Review your policy to see what it says about renewing it and cancelling it. This policy is the contract between you and the carrier and that policy governs the parties' respective rights and remedies.
Of course you need to prove you had another policy in effect to get the fee adjustment - do you expect them to take your word for it?
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You had insurance through the prior company through 9/9 according to their notice to you. Therefore it is not unreasonable for them to be paid for that coverage period. If you did not want that coverage after receiving notice, you should have let them know.
The practice of auto renewal is not unlawful. In this case it was not as much auto renewal as extension of an additional period of coverage to allow you to be covered after non-payment. That will not be considered unlawful.
I wish you the best of luck.
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Contracts can lawfully have an "evergreen clause" -- something to the effect that the contract has a term of one year but it will renew automatically unless a party notifies the other in writing of cancellation by a certain date before expiration. Often used in situation where a lapse could have a serious downside if no one is paying close attention. Read your contract of insurance carefully. I wouldn't be surprised.
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