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 Posted: Tue Mar 24, 2009 2:38 pm Post subject: Reservation of rights letter: Does it protect an insurer? |
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Hi..
How important is the reservation of rights letter to an insured?
What would be his options to respond to this letter?
BillBox92
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BillBox92
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| Posted: Wed Mar 25, 2009 4:06 am Post subject: |
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A reservations of rights letter is typically sent when an insured refuses to sign a non-waiver. Some carriers don’t waste their time with non-waivers and send reservations of rights letter as soon as a claim is questionable. I never really saw a problem with either one. When it comes down to it, the letter serves the purpose to let the insured know there is a question of coverage and so an investigation can take place without implying coverage exists. I don’t know how, but many insured’s read it as the insurance company is taking away or denying coverage.
I really don’t see a reason to respond to the letter as they are typically sent certified mail or in some cases hand delivered so the company knows that they have been received. |
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Dasfuk
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| Posted: Wed Mar 25, 2009 5:03 am Post subject: |
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| Quote: | | I don’t know how, but many insured’s read it as the insurance company is taking away or denying coverage. |
Das, I think the problem lies with the verbiage used in the reservation of rights letter . The reservation of rights letter uses the typical industry jargons which the client finds hard to apprehend.
Anyway OP, Das is right, the reservation-of-right letter doesn't necessarily mean that the coverage has been declined, rather it implies that the insurer has doubts regarding the claim and may even deny it depending on the results of the investigation. |
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JeremyHolter
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| Posted: Wed Mar 25, 2009 5:24 am Post subject: |
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| The reservation of rights letter acts as the insurer’s defense against the bad-faith claim. The reservation of right letter would state that insurer is preserving its right against denying a claim in the future if it’s found that the claim is outside the purview of the policy. |
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jeorge
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| Posted: Wed Mar 25, 2009 5:25 am Post subject: |
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The reservation of rights letter is sent when the insurer finds it difficult to unearth the facts behind the claim. Therefore, you can simply ignore it & let the insurer continue on its way. If they can't find a reasonable defense against denying the claim, they would accept it anyway.
Or, if you are absolutely sure of what you are demanding, you can challenge the letter. You may have to draft a proper letter explaining the reason of your belief and send it to the claim department.
If you are not sure of what to do and also can’t clearly understand what’s written in the letter, ask for specification. You must be absolutely sure about the demand of the insurer and therefore should challenge vaguely written letters.
Regards,
Juanita
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Juanita
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| Posted: Thu Mar 26, 2009 2:52 am Post subject: |
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| Quote: | | If you are not sure of what to do and also can’t clearly understand what’s written in the letter, ask for specification |
I agree, if you don't understand whats written in the reservation of rights letter then ask what is under dispute.
| Quote: | | Or, if you are absolutely sure of what you are demanding, you can challenge the letter. |
I still think this is waste of time. They obviously feel there is a question of coverage. If it is found that they are correct then they will deny the claim or that portion of the claim. If they find that their initial thoughts were incorrect then they will respond to the claim or that portion of the claim that was initially under question.
I say let the investigation take its course and provide any and all information to the carrier related to the claim. The reservation of rights letter or a response to an ROR will not change the outcome of a claim. |
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Dasfuk
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| Posted: Tue Jan 18, 2011 5:39 pm Post subject: Reservation of Rights |
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Isn't there a time limit the carrier has to send the ROR? If they have been investigating a claim for a year and half, the claim goes into litigation, they assign an attorney to defend me, then 30 days before trial they send me a ROR isn't that bad faith??
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r. o'reilly
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