Maybe it’s different in your state as insurance regulations are made at the state level, but in my state it’s contract law. The state approves the policy for use and the insurer issues and binds the policies. The insurer and the insured both have to comply to the terms and the applicable policy language in the contract. The policy will outline the coverage and situations where coverage will not apply. As long as the insurer is operating within the parameters of the policy contract they can deny coverage if applicable. If the insured disagrees they can file a complaint with their state’s department of insurance, but as long as the insurer is operating within the language of the contract the denial’s likely stand.

This is how it works in my state (Oregon). There are no absolutes with coverage and it always comes down to the policy language in the contract which has been filed and approved with the state.