About ten years ago my place burned to the ground,taking all my guns and everything else with it. I stood on the lawn in my bathrobe and watched.
In the next couple months I learned more than I really wanted to know about (A) insurance policies (B) insurance adjustors and (C)what really happens to ammo/guns/powder in a total house fire.
You'll have to read your policy...all of it...even the fine print...to know what's covered. They're all different, but most will have a limit somewhere in there on the amount of coverage of art, jewelry, guns and such. They lump everything from ammo to reloading presses to holsters under "guns", and the limit is usually piddling. Like, $500 or something.
If you want all that stuff covered, you'll have to buy either a separate policy or a rider to your regular one. Be prepared to list absolutely every little thing you want covered, and pay 2%-4% of its value per year. If you sell a gun or buy another, you have to call the insurance company and get the thing changed. Every time.
Some companies won't cover guns at all, some agents won't touch them just on personal bias.
Yeah, it's a bitch.
Edited to say: I didn't really answer your first question. If they refuse to cover a loss because there "was too much ammo" in there, they'll have to either have had a limit in the policy, or be able to show that the stuff wasn't stored according to any fire codes in your particular area. My company had no problem with the ammo, they just didn't cover any of it.