Is it true that a dermatologist can only biopsy a skin condition if it's "active" or do i need to switch doctors? i have seen her multiple times for varying types of rashes that she calls "unspecified dermatitis" but doesn't investigate further?

If you are not satisfied with your current doctor, it is your prerogative to see a different one,

There are specific indications for biopsy for skin lesions as there are also non diagnostic biopsies in non specific conditions. Would suggest improving communication with current dermatologist as to asking specific questions, unfortunately there still are a variety of poorly understood skin conditions.