Non-Waiver vs. Reservation of Rights
Do you know the difference and why we use either? It’s all pretty simple, but we never seem to cover it properly. So, let’s see if we can shed a little light on it.
The most important thing to remember is that we are handling claims for the insurance company. Our job is to make sure they are protected. That does not mean we look for ways to not pay or underpay, but make sure we don’t put them in a position where they may be forced to pay something they don’t owe.
Non-Waiver and Reservation of Rights letters serve the same purpose. The idea is to put the insured on notice that the carrier is going to thoroughly investigate the loss, but by no means are they agreeing to cover all or part of the loss. It is very important to realize when you believe there to be a coverage issue and don’t address it with the insured, the insured may assume the loss is covered, thus possibly putting the carrier in an estopped position.
The normal delivery of a Non-Waiver would be during your inspection. If you spot a coverage issue, you stop and fill out the agreement and present it to the insured to sign. At this time, you will need to explain your concerns and how the agreement applies to the loss. The insured has no obligation to sign the form, but if they won’t, you need to call your manager or inside adjuster for advice on how to proceed, since the Non-Waiver has to be signed by a named insured.
The Reservation of Rights letter is sent directly by the carrier to the insured and requires no signature from the insured. Remember, without one of the documents in play, you may be putting the carrier at risk.Type your paragraph here.