By Eli Goins · FL DFS #P159790 · Reviewed: · 1 min read
Short answer: A reservation of rights letter is the carrier's notice that it will investigate and possibly pay your claim, but is not waiving policy defenses that could lead to a later denial. Any payment made meanwhile is not an admission of coverage. Treat the claim with extra care and document everything carefully.
What it actually means
- The carrier is investigating
- If investigation reveals a coverage issue, the carrier may deny later
- Any payment made in the meantime is not an admission of coverage
Why this matters
You should treat the claim with extra care. Document everything. Do not treat the carrier's initial engagement as a guarantee of payment.
Common reasons for reservation
- Cause of loss is unclear
- Property condition raises preexisting-damage questions
- Timing of notice is late
- Policy condition may have been breached (e.g., vacancy clause)