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Why Would an Insurance Company Decline Your Application? 

It’s no secret that of all the things insurance providers hate, they hate paying most. If an insurer believes you pose a risk, they’ll refuse coverage. There are several reasons why you might get turned down. These depend on the type of insurance and may include the essence of your company’s activity or issues with previous policies.

If you’re turned down for car insurance, a search for driving records might just explain the reason. You might need to pay extra for a specialist plan if you’re struggling to get a standard policy.

Your Company or Occupation

If your business is considered risky, you might not be covered by a standard business insurance policy. This is also the case if the insurer finds your liability exposure too great, including such due to or through third parties. Suppose your job or company involves putting people in dangerous situations (you sell mountain climbing or BASE jumping classes) or handling harmful materials. In that case, it’s best to look for a specialist plan.


If your policy has been voided in the past due to bankruptcy, being declined is likely, not to mention if you’ve been charged with something like insurance fraud. While bankruptcy doesn’t guarantee your application will be rejected, you might be excluded from prime products. In this scenario, you’d probably be offered only very expensive insurance.

Adverse Insurance Claims History

A small business insurance application will lead your claims history to be considered. The provider will ask you to pay more if you’ve made many claims. If their number is deemed excessive, you might not get any coverage at all. If you suspect a claim you’re about to submit will be seen as bogus, do reconsider submitting it.

Poor Premise Upkeep

Your insurer might not offer coverage if you keep valuable goods on your premises but lack the right safety and protective measures in place. If you leave your warehouse unattended for long periods of time, you will have a hard time finding an insurance company that is willing to make an affordable policy available.

Reasons to Decline Life Insurance

Life insurance also comes with certain specifics. Common reasons to decline a life insurance application include traveling to dangerous locations, serious health problems like diabetes or heart disease, a history of drug use, or dangerous hobbies or recreational activities.

If you’re planning to travel to an unstable or dangerous country, you might find upon returning that your insurance company has excluded your trip from coverage. Alternatively, they might suggest starting the policy after you come back. A third option is having your application rejected outright. Complicating matters further is the fact that each company has a different view of what makes a region dangerous.


Insurance providers normally differentiate between major and minor stroke types. A hemorrhagic stroke is far more serious than a transient attack. Your application may be postponed or declined until you can prove you’ve been stable for a period of time the insurer deems sufficient.

Drug Use

To be able to qualify for a policy, you will have to demonstrate you’ve been clean for at least several years. This could also apply to the use of prescription drugs depending on what condition you were taking them for.


Cancer is one of the highest-risk diseases for insurance providers. The type of cancer will determine the outcome of the application. There are two types: grade and stage. To facilitate your search, involving a life insurance broker might help because insurance companies vary widely in their approaches.

Dangerous Hobbies

Sports and activities like skydiving, bungee jumping, and rock climbing are a red flag to insurers. Some companies include such activities in special, high-risk insurance policies, so it’s worthwhile to explore your options.

Coronary Artery Disease and Diabetes

Coronary artery or heart disease might not make getting life insurance impossible, but not many providers would be willing to offer it. The situation with diabetes is a bit better, in particular, if you have no other health issues. However, the scenario with uncontrolled diabetes is more complicated. Diabetes is not covered by every insurance company.

Liver Disease

Your life insurance application will be affected by liver disease. The extent of the impact depends on the types of disease. These include damage due to gallstones or other obstructions due to alcohol abuse, hepatitis, or cirrhosis. Depending on the stage, damage from cirrhosis can be irreversible. While companies will insure many cases, it always depends on the individual circumstances. If you have other diseases or smoke, the prospect of coverage becomes bleak.

On a final note, being rejected by one company shouldn’t deter you from applying with another. Underwriting departments’ guidelines vary. Not every provider will decline your application over a pre-existing condition.


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