Introduction to Reservation of Rights Letters and Non-waiver Agreements in Connection with Homeowner Claims under the Homeowner-3 (HO-3) Insurance Policy

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The homeowner insurance policy is a contract between you and the insurance company where you pay a premium for insurance coverage in the expectation that your insurance company will pay your claim when liability is reasonably clear.

Generally, when a homeowner files an insurance claim, the claim gets assigned to an insurance adjuster. The insurance adjuster contacts the homeowner, arranges for the inspection and evaluation of the damage. The insurance adjuster then confirms coverage and the claim is paid based on the undisputed amount of damage.

There are times when this is not the normal procedure. There are times when, after the claim has been reported by the homeowner, the insurance adjuster will request or insist that the homeowner sign a non-waiver agreement.

Generally, a non-waiver agreement is an agreement between the insured and the insurance company which allows the insurance company to investigate the claim and agree on the amount of damages without the insurance company making any commitment to the homeowner/insured as to whether insurance company will pay the homeowner’s claim.

In some cases, after the claim has been reported, the adjuster will issue what is called a Reservation of Rights letter. The reservation of rights letter is similar to the non-waiver agreement, but it differs in that there is no agreement between the homeowner and the insurance company. The insurance company, through the reservation of rights letter, places the homeowner on notice that they, the insurance company, are handling and processing the insurance claim and reserving their rights, including their right to deny the homeowner’s claim.

If you’re presented with a non-waiver agreement or a reservations of right letter, you should ask yourself, “Why is the insurance company presenting me with these documents?”

You should ask yourself whether the insurance company is, in fact, investigating the claim or whether they are investigating you, the homeowner. You should also give careful consideration as to whether you, at this point in time, need to consult with an attorney who concentrates in homeowner insurance claims.

DISCLAIMER: This and other segments posted on this website are offered for informational and discussion purposes only and is not offered as legal advice. This office only represents homeowners and property owners. We do not represent insurance companies. The information contained in this segment should not be considered to be legal advice.