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How can an insurance company take my premiums but refuse to pay when I have a claim?

Insurance is a business, and insurance companies make money by collecting all they can in premiums and paying out as little as they can in claims. It is reasonable to expect an insurance company to investigate a claim and to deny claims that are not covered. However, it is important that these actions not be taken in bad faith. Any claims denial should be looked at very closely, as well as any settlement offer that only covers a portion of your claim.