What is a reservation of rights letter in regards to an auto insurance claim?
A Reservation of Rights letter from an insurer is a notice that even though the company is proceeding to handle your claim, depending on what happens, certain losses might not be covered by the terms of the policy. Basically by sending such a letter, the insurance company preserves (or reserves) its right to deny coverage at a later date based on the terms of the policy. For example auto insurance Liability policies do not provide coverage for damages which you cause intentionally. If you injure someone under circumstances where the injury could have been accidental or could have been intentional and the case is going to court than the party suing you will have to prove it was one or the other. In this type of situation your insurance company may write you a Reservation of Rights letter saying it will provide you a defense but it will not pay damages if the court finds you caused the injury intentionally. If you are sued after a motor vehicle accident, the legal filing may note several
