Acknowledgment of reserve and obligation to sign?


When the insurer or the claims adjuster has doubts about the origin of the loss or with regard to the declarations of the insured, when he notes that an aggravation of the risk had not been declared, that the contract contains a exclusion or limitation or that he wishes to deepen the investigation, he may ask the insured to sign an acknowledgment of reserve.

The acknowledgment of reserve implies that the insured recognizes the right of the insurer to pursue its investigation in order to determine if the loss is admissible, and therefore, possibly not to compensate it.

If the insured refuses to sign the acknowledgment of reserve, you should give – in writing ideally or verbally – a notice of reserve. For its part, the notice of reserve communicates the position or intention of the insurer, without regard to the consent of the insured.

You must, at all times, continue to inform the insured of the results of the investigation, of the delays and of the stages in the settlement of the claim. Be sure to record the content of your discussions in the client file. Moreover, a written document allows you to keep proof of the communication with your client and facilitates your record keeping. This good practice could be useful in particular in the event of a review of the file or a dispute.

Remember that the reserve notice must mention the name of the insurer, the policy number and the event concerned. The notice must be specific enough for the insured to understand that the loss may not be indemnified. You must also inform him of the possible consequences, for example that the insured could have to reimburse the sums already paid by the insurer to suppliers.