Can my insurance company refuse me coverage?
Insurance isn't always as straightforward as other products. Insurers can deny coverage in many different instances:
An insurance company is not obligated to renew an insurance policy for one of its policyholders. Should the policyholder have excessive claims or a change in circumstances that make him or her uninsurable, the company may choose not to renew. In other cases, they may simply add on additional premiums to reflect the increased risk.
Even if you pay your premiums regularly and on time, an insurance company may not pay out claims that you report. First, the situation surrounding the claim may not be covered under the policy but could be one of the listed exclusions. One example of this is if homeowners have a flood and file a claim with their home insurance company. Because floods are not covered by home insurance, but by flood insurance, these claims will likely be denied. Second, the claim might be at the level of the deductible, which means that the insured is responsible for paying it. Finally, the insurance company may find the damage to have been caused by the insured which may allow them to deny the claim.
If you have one type of insurance with a carrier that offers multiple lines of coverage, they are under no guarantee to approve any applications you submit for additional coverage. They will underwrite and evaluate your application just as they would any other applicant and will either approve or decline the policy, based on the risks you present.