Reservation of Rights
A Reservation of Rights letter will be sent to you if there is a potential conflict between you and your insurance company while a claim is open. A Reservation of Rights letter does not automatically mean there will or will not be applicable coverage. It simply means that your insurance company is “reserving their rights” to make a formal decision on the claim until the issue is cleared up.
All insurance policies have a list of acts and events which are covered, as well as a list of excluded ones. If you look in your policy jacket, it is quite easy to find and understand. Depending on your carrier, exclusions may vary, but for the most part they are the same across all companies. Here are eight common exclusions likely found in your auto in insurance policy.
1. Bodily injury or death caused while you are using your vehicle to carry people or property for compensation or a fee. In other words, don’t use your vehicle for any business reason if you do not have a commercial policy.
2. Liability assumed under a contract.
3. Bodily injury or death to an employee.
4. Bodily injury or death caused by an intentional act.
5. Damage to property owned by or rented by the insured person.
6. Bodily injury or property damage resulting from your operation or use of a vehicle owned by you, other than a covered vehicle.
7. Bodily injury or death or property damage resulting from a relative’s use of a vehicle, other than a covered vehicle, owned by a person who resides with you.
If you receive a Reservation of rights letter from your insurance company, it is best to call and speak to your claims adjuster or agent to make sure you fully understand the situation.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.