Should I be worried about a reservation of rights letter?

Take it seriously without panicking. It means coverage is being examined. Respond fully to requests and build your own causation documentation.

Can they take back money already paid?

Insurers sometimes seek reimbursement of advance payments if coverage is later denied. Read the letter language and get advice before spending advances on unrelated costs.

Do I have to give a recorded statement?

Cooperation is usually a policy condition. Answer truthfully and factually, avoid speculation, and consider counsel if misrepresentation is being raised.

Does it pause my deadlines?

No. Proof of loss and suit limitation deadlines continue to run unless the insurer agrees otherwise in writing.

What Is a Reservation of Rights Letter?

A reservation of rights letter states that your insurer is continuing to investigate or pay while preserving its right to deny coverage later. It is not a denial, but it signals that coverage is genuinely in question and it usually cites the specific policy provisions at issue - exclusions, late notice, occupancy, or misrepresentation concerns. Answer document requests fully, build an independent causation record, keep a written timeline, and watch your proof of loss deadline, which keeps running. Call 516-410-0164 for a free claim review.

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Written by: Kevin Godfrey, President, Long Island Public Adjusters, LLCNYS Public Adjuster License #: PA-1156995

Key takeaways

•A reservation of rights is not a denial, but it shows coverage is in question.
•The provisions cited tell you exactly where the investigation is heading.
•Your proof of loss and other deadlines continue to run while it is outstanding.

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The short version

A reservation of rights letter tells you the insurer is continuing to investigate or even advance payments while preserving its right to deny coverage later. It is not a denial, but it is a warning that coverage is genuinely in question - and it usually cites the specific policy provisions at issue.

What triggers one

Questions about the cause of loss
Possible application of an exclusion such as wear and tear, flood, or earth movement
Concerns about late notice or a policy condition
Suspicion of misrepresentation on the application or claim
Occupancy or vacancy questions
Business use of a residential property

How to respond

Read which provisions are cited. They tell you exactly where the investigation is going.
Answer document requests fully and promptly. Incomplete responses feed a policy-condition denial.
Keep a written timeline of every request, response, and inspection.
Build your own causation record with a plumber, roofer, or engineer report.
Do not guess in recorded statements. Say what you know and produce documents rather than speculating.
Watch your proof of loss deadline, which continues to run.

What it does not mean

It does not mean your claim is denied, and it does not mean payments already made must be returned automatically. It also does not extend your own deadlines.

Pro tip:

Treat the cited provisions as the exam syllabus. Every document you produce should address one of them directly.

If an examination under oath is requested

That is a formal policy condition in many forms. Cooperate, prepare with your documents in hand, and consider counsel if misrepresentation is being suggested.

Get organized early

Long Island Public Adjusters helps Nassau and Suffolk County property owners assemble the causation and documentation record while a reservation of rights is outstanding. Call 516-410-0164 for a free claim review.

For official guidance on property insurance and claim rights, visit the New York State Department of Financial Services.

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