Can my insurance company keep my years worth of payment if they drop me after a week?

i just bought a house last friday and i got insurance through farmers. i just received a letter in the mail that they cannot cover me due to curling of a few roof shingles. they said in the letter that im not getting any money back and i have a balance of 144 dollars for the Time i was covered. i paid almost 1800 for the year up front in the closing and down payment costs. can they do that? i understand how they can steal my money from me. if they arnt going to cover me, shouldn't they have to give me my money back?? in the letter it said they came and inspected it and cant cover my house...its an fha loan. i had the house inspected before i could even buy it and they said they would cover me, now they are saying they cant. what can i do if anything to get that money back so i can get insurance through a different company?