What is a Reservation of Rights Letter?

Originally published by Jeff Raizner.

Most of us have purchased various types of liability insurance, believing the insurance carrier will have our back in the event of a claim. However, insurance policies can contain a wide array of exclusions, which often limit the insured’s ability to recover in whole or in part. Under your insurance policy, your insurer must handle the claims process for you. A reservation of rights (ROR) letter lets you know that even though the company is administering your claim, certain losses may not be covered by the policy. For example, many insurance policies contain provisions excluding coverage for gross negligence and/or intentional acts.

How Important is a Reservation of Rights Letter?

A reservation of rights letter typically serves as notice your insurance company is reserving its right to deny coverage at a later date based on the terms of your policy. Such a letter neither denies the allegations in a claim nor is it a claims denial itself. While these letters appear generic, they are actually a formal indicator some of the losses you are claiming may not be covered. Often, receiving the letter also lets the insured know the information provided in the original claim requires further evaluation. ROR letters are used when an insurer identifies coverage defenses and/or policy defenses.

Insurance companies routinely send reservation of rights letters, as failing to send one can waive their rights. If you receive one, you should contact your insurance company to find out why your claim may not be covered. If an insurance company is heading toward claims denial, you should consult with an insurance coverage attorney regarding the next steps.

Insurance Lawyers

If your insurance company is delaying, underpaying, or denying your valid claim, you should consult with an insurance attorney that routinely handles insurance claims. Raizner Law offers free consultations to review the facts of each case. Over the years, our trial attorneys have handled a wide variety of lawsuits and claims against national corporations and major insurance providers. We are confident we can help you succeed throughout the litigation process. For specific questions concerning your claim, please contact our office.

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