Claims · Insurance Term
Reservation of Rights (ROR Letter)
Definition
A reservation of rights is a letter from an insurer saying it will handle a claim — often by defending you in a lawsuit — while keeping the right to deny coverage later if it finds the policy doesn't apply.
In Plain English
When an insurer isn't sure a claim is covered, it may send a reservation of rights letter instead of a flat denial. The letter usually names the policy terms or exclusions that might limit coverage. Meanwhile, the insurer may keep investigating, or provide a defense under its duty to defend.
A reservation of rights is not a denial, but it is a warning. Read it closely and respond to any requests for information. Many owners have their own attorney review the letter.
Insurers must handle claims in good faith, and questions about whether an insurer acted unreasonably can raise bad faith issues — a legal question for an attorney. Who controls the defense and pays defense costs can also become an issue.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: a tenant sues an apartment owner over mold. The insurer agrees to defend under a reservation of rights, citing the policy's mold exclusion. The defense goes forward, but the insurer may later decline to pay a judgment or settlement if the exclusion applies.
What to Watch For
- Read the letter carefully and note every exclusion or condition it cites.
- Respond in writing to requests for documents or information by any deadline.
- Consider having an attorney review the letter, especially for large lawsuits.
- Notify any other insurers that may also apply, such as umbrella or tenant policies.
Last updated October 14, 2026 · Primesure editorial team · How We Write