# Reservation of rights

> A reservation of rights letter says an insurer is handling a claim but may still deny coverage later. What it signals after a crash and who gets notice.

Canonical page: https://accidentclaimfacts.com/glossary/reservation-of-rights/  
Last reviewed: October 29, 2026 by the Accident Claim Facts editorial team  
General information, not legal advice. Talk to a licensed attorney in your state.

## Quick answer

A reservation of rights is a letter in which an insurer says it will keep investigating, handling or defending a claim, while keeping the right to deny coverage later. It means "we are not yet agreeing that this policy covers what happened."

## In a car accident claim

These letters usually go to the insurer's own customer, the driver who may be at fault. Insurers send them when there is a coverage question: whether the driver had permission to use the car, whether the car was being used in a way the policy excludes, or whether the crash was reported late.

For an injured person, a reservation of rights on the at-fault driver's policy is a warning sign. If the insurer later denies coverage, the claim may have to turn to other sources, such as your own uninsured motorist coverage. The guide to [working with the adjuster](https://accidentclaimfacts.com/claim-process/insurance-adjuster/) explains coverage questions, and [uninsured driver accidents](https://accidentclaimfacts.com/accidents/uninsured-driver-accidents/) covers what happens when there is no coverage.

Some states set deadlines for these letters. In Florida, a liability insurer must send its policyholder written notice within 30 days after it knew or should have known of the coverage defense. In Virginia, the insurer must also tell the injured claimant or their lawyer within 45 days; if it does not, the insurer waives that coverage defense, to the extent of the claim.

## Example

> **Example:** A driver borrows a friend's car and causes a crash. The friend's insurer learns the borrower may not have had permission, so it sends a reservation of rights letter while it investigates. The injured driver's claim continues, but payment from that policy is now uncertain.

## Related terms

- [Bad faith](https://accidentclaimfacts.com/glossary/bad-faith/)
- [Cooperation clause](https://accidentclaimfacts.com/glossary/cooperation-clause/)
- [Policy limits](https://accidentclaimfacts.com/glossary/policy-limits/)

## FAQ

### Is a reservation of rights the same as a denial?

No. The insurer is still handling the claim and has not denied coverage. It is keeping the option to deny later if its investigation supports a coverage defense.

### Will you be told if the other driver's insurer reserves its rights?

Not always. The letter goes to the insurer's own customer. Some states, such as Virginia, require the insurer to notify the injured claimant as well.

## Sources

- [Code of Virginia, § 38.2-2226](https://law.lis.virginia.gov/vacode/title38.2/chapter22/section38.2-2226/) — notice to claimants of reservation of rights and nonwaiver agreements
- [Florida Legislature, Florida Statutes § 627.426(2)(a)](https://www.flsenate.gov/Laws/Statutes/2026/627.426), checked October 29, 2026