Normally if a policy runs out without being renewed, it just lapses and you have no cover from that point.

Yes I used to assume that - until I was put right by an insurance expert on another forum I use.

When you agree to autorenewal, unless you inform the insurers before the renewal date, the policy will be renewed. This is regardless of whether or not they have managed to collect the premium by then.

When they realise that payment has not been secured they will then try to contact the policyholder to enable him to make payment. If that fails they will then cancel the policy.

The question of the £50 cancellation fee may be somewhat the least of your worries. You now have a cancelled insurance policy on your record. When you make an insurance proposal you will almost certainly be asked something like “have you ever has an insurance policy cancelled or a proposal declined”. Note the word “ever”. Cancellations do not become “spent” after so many years like convictions or driving licence endorsements. This means you will always have to declare this event whenever you make an insurance proposal. Quite what effect this might have on premiums I don’t know.

If you're lucky he question may only refer to the type of policy you are buying (e.g. motor, household, etc). But most I've seen don't make such a distinction/

Edited by Middleman on 20/10/2024 at 18:36

Simply ignore any ridiculous attempts to con money from you, in the bin with it.

But that does not address the problem of a policy cancellation on the OP's record. As I said, £50 may prove the very least of his worries.

The OP cancelled the policy and not the insurer.

The OP didn't do anything:

I assumed that as they couldn't take payment from my card (new one had been issued in the last few months) the policy would not renew.

But it did renew and was subsequently cancelled by the insurer.