A Reservation of Rights letter from your insurance is an immediate red flag for any insurance policy holder. Why should this letter concern you and what immediate action should you take if you receive a reservation of rights notification?
A Reservation of Rights Letter is a Form of Denial
The Reservation of Rights letter is sarcastically known as a “denial letter” inside the insurance company. Legally, this letter informs you the insurance company has concerns regarding part or all of the claim against your policy, and they reserve the right to deny coverage at any point in the future. The Reservation of Rights letter also tells you there is a possibility that the coverage of the policy will not be sufficient to cover your potential financial exposure. If you are a defendant in a lawsuit and you are expecting your insurance company to defend you based upon an insurance policy this is a huge red flag.
It is Important to Understand Your Rights as a Policy Holder
You should contact the Watkins Firm immediately for a free consultation at 858-535-1511. Learn about your rights as an insured policy holder and your risks regarding your claim, insurance coverage and your position in a lawsuit. It may be necessary for the Watkins Firm to immediately protect your interests by filing a lawsuit against your insurance company regarding the coverage provided under the policy or to assert your rights to a Cumis Counsel or independent counsel under California law.
It may surprise you to learn that the attorneys representing your insurance company actually owe their primary legal allegiance to the policy itself, and not to you as the policy holder. This means it is not only in their interest, but their legal obligation to defend the policy in spite of your best interests and to throw you under the legal and financial bus if that protects the policy itself from liability.
What is a Cumis Counsel?
California law protects our citizens and insurance policy holders from this conflict of interest. In these circumstances, your own insurance company must pay the bill for you to have independent representation or “Cumis Counsel” to protect your interests and ensure any settlement remains within the limits of your insurance coverage allowing you to walk away without owing any money.
It is against the law for an insurance company to knowingly mislead their policy holders relating to the coverages provided, yet it happens more often than you might think. The answer to the question Why is a Reservation of Rights letter from your insurance a red flag is simple: it means you are in immediate risk of financial exposure. Contact the Watkins Firm and our experienced insurance coverage attorneys and protect yourself.
We invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
