If you are involved in an automobile accident your insurance company may send you a reservation of rights letter. A reservation of rights letter states whether the insurance company will defend you in court and how much it is willing to insure you for. 

Why Do Insurance Companies Use Reservation of Rights Letters?

After a car accident, the other motorist may make several claims against you in court. Depending on your insurance policy, an insurance company may only have to pay for certain claims. You will be responsible for the claims that the insurance company doesn’t pay. However, the insurance company may defend you against all claims, even though it will only pay for some of them if you lose. A reservation of rights letter makes it clear to the insured which claims will be defended and which will be indemnified by the insurance company. 

Do I Need a Lawyer if I Receive a Reservation of Rights Letter?

A reservation of rights letter can expose you to serious liability after an accident. An experienced insurance lawyer can help you determine whether the reservation of rights letter is consistent with your insurance policy. An insurance lawyer can also represent you in court if you have a dispute with your insurance provider.