Home

When you are sued and your insurance company issues a “reservation of rights” letter, it is not standing fully behind you. It is telling you — often in careful, technical language — that it may later refuse to pay part or all of any settlement or judgment. In plain terms, it is warning that you, not the insurer, may ultimately be left with the bill.
At the same time, the insurer usually insists on controlling your defense by appointing one of its pre-approved “panel counsel.” That lawyer is selected, evaluated, and paid by the insurer, even though the outcome of your case may determine whether the insurer owes you coverage at all. This conduct creates inherent conflicts of interest at the very moment when your personal financial exposure is at its greatest.
You are not powerless in this situation.
California law gives policyholders concrete rights when a reservation of rights creates conflicts between the insurer’s interests and your own. In certain circumstances, the insurer must pay for independent counsel of your choosing — commonly known as Cumis counsel — and you are entitled to informed disclosure and loyalty from any lawyer who represents you.
This site explains how reservations of rights work, why conflicts arise, and what steps you can take to protect yourself. If your insurer and its panel counsel handle your case properly, you will learn what compliance looks like. If they do not, you will learn how to recognize the warning signs and assert your rights before it is too late.

This site’s intended audience is policyholders, like you, not lawyers.

Click Res Rights in the upper left corner for a table of contents.