When you receive a reservation of rights letter, the first thing you should do is read it carefully, document everything, and avoid responding without legal guidance. This letter signals that your insurer is reviewing your claim, but they may still deny coverage later based on exclusions in your policy.
For commercial property owners and high-value homeowners, these letters often appear after hurricane, hail, wind, or fire damage claims. While the insurer may seem cooperative, this type of notice should always be treated as a warning sign that the claim may not be paid in full—or at all.
Immediate, informed action with a Houston insurance claims lawyer is essential to protect your rights and your financial recovery.
Why Insurance Companies Send Reservation of Rights Letters
At Barcus Arenas, PLLC, we frequently see insurers use these letters to justify delays, reduce payouts, or build a case for denial. They are especially common in large or complex claims involving:
- Cosmetic damage exclusions in surplus line commercial policies
- Disputes over pre-existing damage or late reporting
- Potential policy violations or misrepresentations
- High-value structures such as multi-family buildings, retail centers, and luxury homes
Texas courts allow insurers to send reservation of rights letters as long as they notify the policyholder promptly and base the reservation on specific, legitimate policy concerns. But many insurers issue them prematurely or broadly, hoping to intimidate property owners into accepting partial or denied claims.
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How We Help Clients Respond Strategically
Once a reservation of rights letter is issued, every move matters. Our ROR insurance attorneys work directly with clients to protect their interests and strengthen their claims. We take the following steps:
- Review the letter and the full insurance policy in detail
- Identify the insurer’s stated concerns and challenge vague or unsupported language
- Involve independent experts, such as engineers or roof inspectors, to verify damages
- Prepare a documented response that preserves the policyholder’s rights
- Negotiate directly with the carrier to resolve disputes—or prepare to litigate if needed
With nearly two decades of combined experience, we understand how these letters are used to weaken claims. Our team includes former adjusters and specialists who know how to counter these tactics effectively.
Why You Should Take These Letters Seriously
A reservation of rights letter is not a formality—it is a legal step that can significantly affect the outcome of your claim. Failing to respond correctly may hurt your chances of full compensation. Here’s why it matters:
- It allows the insurer to continue investigating without admitting liability.
- It may lead to a partial denial or outright rejection of your claim.
- It often signals the insurer is looking for reasons to avoid full payment.
- It creates a paper trail that may be used in litigation.
In short, this letter protects the insurer—not you.
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Steps to Take When You Receive a Reservation of Rights Letter
To protect your claim and position yourself for the best possible outcome, follow these steps immediately:
- Read the letter in full: Highlight any policy provisions or exclusions cited. Pay attention to vague language like “under investigation” or “may not be covered.”
- Compare it to your policy: Review your policy’s actual language to see if the exclusions apply.
- Preserve all communication: Save emails, letters, texts, and voicemails from the insurer or their adjusters.
- Document your damage independently: Hire qualified experts to inspect the damage and provide written reports with photos.
- Do not respond without legal advice: Any written or verbal response can be used later. Legal review is critical.
We help our clients manage this process from day one, ensuring that every step strengthens—not weakens—their position.
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Bad Faith and the Texas Insurance Code
Insurers in Texas must follow strict standards under the Texas Insurance Code, including Chapter 541. They may not:
- Misrepresent facts or policy provisions
- Fail to promptly investigate claims
- Delay payment without a valid reason
- Use threats or pressure to settle unfairly
Sending a vague or unjustified reservation of rights letter can be the first sign of bad faith. When this occurs, we hold insurers accountable through litigation, seeking full compensation and, when appropriate, additional damages under Texas law.
Why Policyholders Choose Barcus Arenas, PLLC
We are not just insurance lawyers—we are advocates committed to protecting families, businesses, and the property they depend on. Policyholders across Texas trust Barcus Arenas, PLLC because of our:
- Personalized, boutique service tailored to each case
- In-depth knowledge of commercial and surplus line policies
- Access to real experts, including engineers, public adjusters, and former carrier insiders
- Readiness to litigate when insurers refuse to be fair
Our collaborative, trial-ready approach gives clients the leverage they need—whether they are dealing with hail damage to a metal roof or a full-scale business interruption loss.
Start With a Free Consultation
If you’ve received a reservation of rights letter, now is the time to take action. At Barcus Arenas, PLLC, we offer contingency-based representation and Zoom consultations to help you make informed decisions quickly. With our extensive industry insight and hands-on legal support, we will help you push back against unfair tactics and fight for the full value of your claim.
Contact us today to get started and take control of your insurance dispute.
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