Insurers take steps to help avoid a loss, including inspections. (a full inspection of your home's electrical and heating systems should be performed annually by a licensed contractor) The typical insurance company inspection is much simpler, usually checking for any obvious problems and determining underwriting details such as the amp rating of your electrical service if fuses or circuit breakers, roof pitch, etc.
The result of their inspection would also determine how much insurance are you qualified to get - or what is the condition or your home during the time that you applied for home insurance. This will be another basis for your whole insurance policy the you and your insurance agent will agree upon.
Of course they can. It's part of the insurance contract, you agreed to the inspection when you signed the application for insurance. You also have the right to refuse the inspection; but this is a violation of the insurance contract and would likely result in rejection of your application.
There are many reasons why an insurance company may send an engineer to inspect the damage to your home. The main reason is to determine the cause of the damage to your home. For example, the company may send an engineer to inspect damage to your home if your roof is damaged in order to figure out if it was caused by a covered cause of loss (hurricane) or if the damage is from normal wear and tear. If after the inspection the insurance company denies your claim I suggest that you speak with an attorney in your local area who specializes in first party insurance law.
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