When might an insurance company deny a claim?

An insurance company may deny a claim when the policyholder failed to pay the premium. Premiums are the regular payments made to keep an insurance policy active, and if a policyholder does not make these payments, the policy may lapse or be voided. This failure to maintain premium payments means that there is no active coverage when the claim is made, ultimately resulting in the denial of the claim. Insurance companies are contractually obligated to provide coverage only when premiums are current, as coverage is contingent upon the policy being in force.

In contrast, other scenarios presented do not inherently lead to a claim denial. Timely claims can be honored if valid, damages from water loss may be covered depending on the specifics of the policy, and preferences for cash versus repairs relate to payout options rather than eligibility for claims.