What is one possible outcome of an adverse underwriting decision?

One possible outcome of an adverse underwriting decision is that it leads to higher rates based on differing information. Adverse underwriting decisions occur when an insurer declines to offer coverage, imposes higher premiums, or restricts terms based on the applicant's risk profile, which may be influenced by factors such as claims history or personal financial status.

When an application for insurance presents information that suggests a higher risk, insurers may adjust the premium rates upwards to compensate for that increased risk. This decision reflects the insurer’s practice of ensuring that the risk they are assuming is adequately priced. Thus, if an applicant experiences an adverse underwriting decision, it's likely they will face higher premium costs compared to those deemed lower risk, which is why this outcome is considered valid in the context of the question.