Claim Insight: What Is a Reservation of Rights Letter?
A Reservation of Rights letter is a standard practice in the insurance industry. However, it’s important to understand what it means and how it might affect your claim.
If you’ve filed a property insurance claim and received a Reservation of Rights (ROR) letter from your insurer, you might be wondering:
👉 Does this mean my claim is denied?
👉 Am I in trouble?
👉 What should I do next?
The short answer? Don’t panic. A Reservation of Rights letter is a standard practice in the insurance industry. However, it’s important to understand what it means and how it might affect your claim.
What Is a Reservation of Rights Letter?
A Reservation of Rights (ROR) letter is a notification from your insurance company stating that they are investigating your claim but reserve the right to deny coverage later if they find that your policy does not cover the loss.
It’s basically the insurer’s way of saying:
🗣️ “We are looking into your claim, but we’re not promising to pay it yet.”
This allows the insurance company to move forward with their investigation without accidentally waiving their right to deny coverage if they later find a policy exclusion or coverage issue.
Why Do Insurance Companies Send Reservation of Rights Letters?
Insurance carriers send ROR letters for various reasons, including:
✅ Unclear Coverage – If the insurer isn’t sure whether the policy covers your loss, they will investigate while reserving their right to deny the claim later.
✅ Potential Policy Exclusions – If your claim involves something that might fall under an exclusion (e.g., neglect, wear and tear, or intentional damage), they need time to review.
✅ Late Reporting – If you took too long to report the loss, the insurer may question whether the delay impacted their ability to assess damages properly.
✅ Possible Misrepresentation – If there are discrepancies in your application or claim details, the insurer may need to verify information before making a decision.
Does a Reservation of Rights Letter Mean My Claim Will Be Denied?
🚨 No, it does NOT mean an automatic denial. 🚨
It simply means the insurer is still evaluating the claim. Many claims move forward and get paid even after an ROR letter is issued.
However, it does mean that:
✔ The insurer is looking closely at your policy and claim details.
✔ There may be questions about coverage that need to be addressed.
✔ You should be proactive in providing any requested information.
What Should You Do If You Receive a Reservation of Rights Letter?
1️⃣ Read It Carefully
The letter should outline the specific concerns the insurer has. Pay attention to:
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The sections of your policy they reference.
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The reason they are reserving their rights.
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Any deadlines for providing additional information.
2️⃣ Don’t Ignore It
While an ROR letter isn’t an outright denial, failing to respond or cooperate with the insurer’s investigation could hurt your claim.
3️⃣ Provide Supporting Documentation
If the insurer is questioning coverage, provide any documents, photos, or evidence that support your claim.
4️⃣ Seek Professional Help If Needed
If the letter contains complex legal language or hints at a possible denial, consider:
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Consulting with a public adjuster to review your claim.
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Speaking with an attorney if you suspect bad faith handling.
5️⃣ Keep Detailed Records
Document all communications with your insurer, including:
✔ Emails and letters exchanged
✔ Phone calls (date, time, and who you spoke with)
✔ Any additional evidence you submit
Final Thoughts
A Reservation of Rights letter is a standard practice in insurance claims—it doesn’t mean your claim will be denied, but it does mean the insurer is reviewing certain aspects carefully.
By staying informed, proactive, and organized, you can help keep your claim on track and ensure you receive the coverage you’re entitled to.
Need expert insights on property insurance claims? Follow Tugboat Claims for more tips and guidance! 🚢💡
Disclaimer:
This blog is intended for informational purposes only and does not constitute legal or financial advice. Tugboat provides information and support, but we are not licensed public adjusters or attorneys. We do not negotiate or adjust claims on your behalf. All advice given is intended to empower you in managing your own claim, but it is ultimately your responsibility to pursue and handle the claim. Tugboat is not responsible for claim outcomes. Additionally, our tools are provided based on the information you provide, which may be incorrect or incomplete. Always consult a licensed professional for case-specific guidance.
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