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Apply[Insurance Company Name]
[Claims Department / Coverage Department]
[Address]
[City, State, ZIP Code]
[Phone Number]
[Email Address]
Date: [Date]
To: [Insured / Policyholder Name]
[Address]
[City, State, ZIP Code]
Re: Reservation of Rights
Policy Number: [Policy Number]
Claim Number: [Claim Number]
Date of Loss / Incident: [Date]
Underlying Matter: [Case Name / Claim Description]
Dear [Name]:
We write regarding the above-referenced claim, lawsuit, demand, or occurrence.
Based on the information currently available, there may be questions concerning whether some or all of the matters presented are covered under the policy identified above. Accordingly, [Insurance Company Name] is proceeding under a full reservation of rights.
The claim or matter currently appears to involve the following:
[Brief description of incident, allegations, demand, lawsuit, or loss]
Date notice was received: [Date]
Current status of matter:
☐ claim investigation
☐ pre-suit demand
☐ lawsuit filed
☐ defense requested
☐ other: [Describe]
At present, the information available to us includes the following:
[Brief summary of reported facts]
This summary is based only on the information currently available and may change as additional facts are developed.
Coverage may be affected by one or more of the following issues:
☐ whether the alleged loss falls within the policy’s insuring agreement
☐ whether an exclusion may apply
☐ whether a condition precedent to coverage has been satisfied
☐ whether timely notice was provided
☐ whether the alleged damages fall outside covered loss
☐ whether some claims may be covered and others not covered
☐ other issue: [Describe]
Additional coverage concerns:
[Insert details]
Without limiting any rights, we direct your attention to the following policy provisions, endorsements, exclusions, definitions, and conditions that may be relevant:
[Insuring agreement provision]
[Exclusion provision]
[Condition provision]
[Definition provision]
[Endorsement provision]
Additional policy language, if any:
At this time, [Insurance Company Name]:
☐ is investigating the matter and has not yet made a final coverage determination
☐ will provide a defense subject to this reservation of rights
☐ will participate in the defense subject to this reservation of rights
☐ is reviewing whether a defense obligation exists
☐ other: [Describe]
If a defense is being provided, that defense is offered subject to all rights under the policy and applicable law, including the right to later deny coverage in whole or in part if the facts, allegations, policy language, or law support that position.
Nothing done by [Insurance Company Name], including investigation, communications, claim handling, settlement discussions, appointment of counsel, payment of defense costs, or any other act, shall be construed as a waiver of any right, defense, limitation, exclusion, or policy condition.
[Insurance Company Name] expressly reserves all rights under the policy and applicable law.
To complete our evaluation, please provide the following, if applicable:
[incident report]
[pleadings or demand letter]
[contracts]
[photos or videos]
[witness information]
[medical or repair records]
[other documents]
Requested deadline for response: [Date]
Because a reservation of rights may, in some circumstances, create a conflict of interest, you may wish to consult personal counsel regarding your rights and obligations.
If independent counsel rights may apply under the law governing this claim, those rights shall be addressed as follows:
This letter is based on the information presently known and is not intended to be exhaustive. [Insurance Company Name] reserves the right to rely on any other policy terms, endorsements, exclusions, conditions, facts, defenses, or legal positions that may now exist or later become known.
If you believe any of the facts stated in this letter are inaccurate or incomplete, please notify us immediately in writing.
If you have documents or information you believe affect coverage, please provide them promptly.
Please treat this letter as formal notice that [Insurance Company Name] reserves all rights with respect to this matter.
Sincerely,
Signature: __________________________
Name: [Claims Representative / Coverage Counsel / Adjuster]
Title: [Title]
Insurance Company: [Company Name]
Copy to:
[Defense Counsel]
[Broker / Agent]
[Coverage Counsel]
[Other Recipient]
Each template already follows legal structure and best practices.
The agreement is automatically filled and adapted to your inputs.
Check the generated document, make edits if needed, and download a ready-to-use agreement.
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For quick answers, scroll below to see the FAQ.
Frequently asked
A reservation of rights letter is a written notice, most commonly sent by an insurer to an insured, stating that the insurer is investigating, handling, or even defending a claim while reserving the right to later deny coverage in whole or in part. NAIC claims-handling standards recognize that where coverage is in question, a reservation of rights letter should be sent to the insured.
You need a reservation of rights letter to clearly state that participation in the claim process does not waive coverage defenses, exclusions, conditions, or other policy rights. ABA guidance notes that some states require reservation letters to identify all potentially applicable exclusions and conditions, and carriers may lose the ability to rely on language not included in the letter.
Use a reservation of rights letter as soon as there is a legitimate question about coverage, the duty to defend, exclusions, conditions, or other claim-related issues. FindLaw notes that timeliness matters because waiting too long can create waiver arguments in some jurisdictions.
Start with the policyholder name, claim number, policy number, and the underlying claim or lawsuit. Then describe the known facts, identify the policy provisions that may affect coverage, state what the insurer is doing now, and expressly reserve all rights to deny coverage or assert policy defenses later. If a defense is being provided, the letter should also explain whether it is being provided under a reservation and whether any conflict-of-interest issues may arise.
AI Lawyer can help by organizing the letter into clear sections so each reviewer can find the claim details, policy references, and reserved rights quickly. It can also add internal reference fields, claim notes, and placeholders that make updates easier to track. A consistent structure helps reduce repeated edits and lowers the chance of missing key details like claim numbers, policy language, defense status, or non-waiver language before the letter is sent.
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