Glossary

Reservation of rights

An insurer's written notice that it is handling a claim or defending a suit while keeping the right to deny coverage or recover costs later.

Also called: reservation of rights letter, ROR, ROR letter

A reservation of rights is a letter in which an insurer says it will investigate or defend a claim without conceding that the policy covers it. Insurers send one when a lawsuit mixes covered and uncovered allegations, when an exclusion might apply, when notice may have been late, or when facts still to be found could put the loss outside the policy. In many states the letter protects the insurer from being held to have waived a coverage defense by defending without objection.

The letter usually cites the specific provisions in doubt. The duty to defend is generally measured by the complaint's allegations: if any claim is potentially covered, most states require the insurer to defend the whole suit, often under a reservation. The insurer may later ask a court for a declaratory judgment on coverage, and some policies or courts allow it to recoup defense costs if no coverage is found.

Some states treat a reservation that creates a conflict of interest as a trigger for independent counsel paid by the insurer. California's rule, Civil Code section 2860, produced the term Cumis counsel.

When one arrives, read it that day. Respond in writing, keep cooperating, and send it to your broker and a coverage attorney if the claim is large. Do not assume the claim is covered or that it is denied. The guide on reservation of rights letters: what they mean and how to respond explains what each paragraph means, and Independent counsel and Cumis counsel: when your insurer must pay for your own lawyer covers the conflict rules.

Last reviewed October 10, 2026

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Related terms

Duty to defend A liability insurer's obligation to pay for your defense of a lawsuit that could potentially fall within coverage, which is broader than its duty to pay. Duty to indemnify The insurer's obligation to pay a covered judgment or settlement against you, decided on the facts established rather than the complaint's allegations. Notice of claim The report a policyholder must give an insurer about a loss, claim or lawsuit. The policy sets the timing, and late notice can put coverage at risk. Defense costs The attorney fees, expert fees and other expenses of fighting a claim, which some policies pay on top of the limit and others deduct from it. Exclusion A policy provision that removes coverage for specified perils, property, people or types of loss that the insuring agreement would otherwise include.

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