What does the term 'declination' refer to in insurance?

Declination in the context of insurance specifically refers to the refusal of coverage by an insurance provider. When an insurer assesses an application for insurance, they may determine that they are unable or unwilling to provide coverage based on various factors, such as the applicant's risk profile, the nature of the property or activity being insured, or other underwriting criteria. This refusal can occur for a variety of reasons, including but not limited to high risk associated with the insured party or previous claims history.

In contrast, the other terms mentioned relate to different aspects of insurance processes. Limiting policies refers to the insurer's decision to set specific boundaries on the coverage offered. Insuring high-risk clients indicates a willingness to accept applicants who may pose a greater risk, typically with corresponding adjustments in underwriting practices. Adjusting premiums involves altering the cost of coverage based on factors such as risk assessment or claims experience. Therefore, understanding declination as a refusal of coverage helps clarify how insurers manage their risk and client relationships.