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What Are Demand and Reservation of Rights Letters?

If you’re involved in a personal injury case, you might get an unpleasant surprise in the mail one day: a reservation of rights letter. This letter comes from the insurance company that’s responsible for your damages, and it can be quite upsetting and confusing.

But, there’s good news: a reservation of rights letter isn’t unusual in a personal injury case, and your personal injury attorney can handle it for you quite effectively. Often, this letter is a response to a demand letter from your lawyer. Read on to learn exactly what reservation of rights and demand letters are and how they affect your personal injury case.

What Is a Demand Letter?

A demand letter is written by your personal injury lawyer. It’s often the first official communication that your attorney has with the insurance company that’s responsible for your injury compensation. Stated simply, a demand letter puts the insurance company on notice that you have sustained injuries due to their policy holder’s actions.

The demand letter may include supporting documentation, for example:

  • The police report from your accident
  • Witness statements from those that saw the accident
  • Your medical bills
  • Photographic documentation of your injuries, like X-rays
  • Proof of missed wages due to your injuries

Generally, a demand letter also requests compensation in the form of the insurance policy limit. Because the insurance policy limit often isn’t immediately known, this may not list a specific amount. The demand letter may state that the damages are expected to exceed the expected policy limit.

The demand letter also informs the insurance company that if they pay the requested amount, you will relinquish any further claims. Usually, a demand letter is the start of the negotiation process in a personal injury case. Often, the response from the insurance company includes a reservation of rights letter.

What Is a Reservation of Rights Letter?

A reservation of rights letter simply says that an insurance provider is not waiving any legal rights in regards to your claim. In a personal injury case, this essentially means that the insurer hasn’t denied or fought your claim at this time but that they may do so in the future following their own internal investigation.

Generally, insurance companies tend to issue reservation of rights letters early on, usually shortly after your personal injury attorney informs them that you have a claim through a demand letter.

The reservation of rights letter tells you that an investigation is coming up in which the insurance company reviews all the information provided by your lawyer as well as any information from their own client (the one who caused your injury).

It’s important to know that you’re under no obligation to respond to the reservation of rights letter from the insurance company — in fact, it’s best if you reach out to your personal injury attorney if you receive this letter at home so they can handle it.

The same applies to phone calls or other letters from the insurance company or even the responsible party themselves. Anything that you say to the insurance company or their investigators, no matter how harmless it might seem, could potentially be used against you in your personal injury case, so don’t take any chances.

Demand letters and reservation of rights letters are both a normal part of the personal injury claim process, but there’s no doubt that they can get quite complicated, so that’s why you need a highly experienced personal injury law team in your corner.

The Gelman Gelman Wiskow & McCarthy LLC attorneys have helped accident victims with their personal injury cases for over 65 years, and they’re ready to help you now. Call the office or contact us online for help today.

  • In 2020, we settled or won, at trial/mediation/arbitration, 112 personal injury cases. Our clients recovered over ten million dollars. Our firm set a record in 2020 by settling 15 cases for $200,000.00 or more. In the last eleven years, we have settled/won over one thousand cases and our clients have recovered over 100 million dollars.
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  • Results may vary depeding on your particular facts and legal circumstances.
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