Under which circumstance may an insurer refuse to continue comprehensive coverage?

The answer is based on the ability of insurers to manage risk based on the claims made by policyholders. When a claim is filed under the comprehensive coverage, it indicates that the insured has experienced a covered loss, which can signal to the insurer a higher risk profile associated with that policyholder. Insurers evaluate their books of business and may decide to discontinue coverage if they perceive that a policyholder poses a heightened risk or if the claims history under that particular coverage area indicates a pattern of frequent or severe losses.

While the other options present scenarios, they do not relate directly to the insurer's right to refuse to continue comprehensive coverage based on claims experience. For instance, claims made under the liability portion or the quality of the insured’s driving history might influence other underwriting decisions but are less directly tied to the specific comprehensive coverage. Additionally, the expiration of a policy term is a standard occurrence that would not allow for the refusal of coverage continuation—it would merely necessitate a renewal process. Thus, the unique relationship between claims activity under comprehensive coverage and the insurer’s risk management strategies clarifies why the first scenario is the correct basis for such a refusal.