Reservation of Rights

A reservation of rights (ROR) is a letter an insurer sends its policyholder early in a claim, saying in effect: "We will investigate and defend this matter, but we are reserving our right to deny coverage if it turns out the claim isn't covered." It lets the carrier honor its duty to defend quickly without accidentally waiving a coverage defense by acting.

Insurers issue an ROR when coverage is uncertain — for example, an allegation that might fall under a policy exclusion, a question about whether the incident happened during the policy period, or claimed damages that may exceed what the policy covers. It is a routine claims-handling step, not an accusation.

For the insured, an ROR is a signal to read the letter carefully and, in higher-stakes matters, seek advice — because if the carrier and insured's interests diverge, the insured may be entitled to independent ("Cumis") defense counsel. The adjuster continues handling the claim while the coverage question is resolved.