Reservation of Rights

Reservation of Rights refers to a letter issued by an insurance company in response to a claim to limit their liability by reserving the right to investigate the claim and deny coverage if the claim does not qualify for coverage.

A Reservation of Rights letter may be standard procedure for some insurance companies. It may also be issued if coverage is in doubt, for example, if

  • the claim was reported late;
  • not enough information was provided to the insurance company to meet the definition of a claim; or
  • the insurance company suspects fraud

A Reservation of Rights letter is not the same as a Denial of Coverage letter.