Yes, this happens to a few people...there are people that win appeals.... THis site has information on handling insurance issues. Also, check out the vb support group on msn and msn back up site for examples of appeal letters that WON!
The key is to explain to the insurance co. why this is not cosmetic... PWS left untreated can darken. It is rare, but important to tell the insurance co. that pws can also thicken and cobble with age. Treated early on, the pws can be managed with more success.
here are the links to msn. YOu have to join the groups (I will approve you just let me know you have a pws or mention birthmarks in the applications).