There is an important legal fact that most California and San Diego insurance policy holders simply aren’t aware of: Your insurance company’s first legal obligation is to their own policy, not you. Attorneys representing the insurance company in any lawsuit or dispute that arises regarding an episode that results in the filing of an insurance claim owe their first allegiance to the policy itself, not you, the insured. What is a Reservation of Rights and an insurers duty to defend here in California? What is a Cumis Counsel and why do you need to understand that term if you are being sued as part of a lawsuit involving insurance coverage?
When a claim or lawsuit arises under a liability insurance policy, the insurance company has a duty to “indemnify” (compensate for harm or loss and secure the insured against legal financial responsibility for their actions) the policy holder. This requires the insurance company to defend the policy holder when litigation or a lawsuit is associated with a valid claim under the original policy. The legal issue is that the insurance company policy usually provides the insurance company itself with the right to control the defense, and to select defense counsel. While in many cases the interests of the policy itself and the insured policy holder are often in harmony, a serious legal “conflict of interest” arises when insurance company attorneys (whose first duty is to the defense of the policy itself) must consider harming the interests of the policy holder in order to protect the policy itself.
When an insurance company sends a Reservation of Rights letter, they are preparing the insured for the likelihood that the insured policy holder is likely to be sacrificed by the insurance company during legal proceedings in order to protect their own interests. Within insurance circles, the Reservation of Rights letter is sarcastically called a “denial letter.” When you receive a Reservation of Rights letter red flags should immediately go up in your mind. Your next step should be to call the Watkins Firm for a free consultation at 858-535-1511 to learn about “Cumis Counsel” and how your insurance company will probably have to pay for you to have your own independent counsel. Best of all, your insurance company has to pay for us to represent and protect your interests! Ask about our decades of litigation experience and expertise here in San Diego and our track record of success in these cases.
The Reservation of Rights and an insurers duty to defend create a legal conflict of interest. California law protects you, the insured, and requires your insurance company to pay for your own independent Cumis Counsel who will watch over and protect your interests and insure that any settlement in the case completely releases you from financial exposure.