8 Tips on Improving Reservation of Rights Letters

March 10, 2009

1. Improve Letter Format.

Here are a few ways to keep the letter format sharp:

• Write out dates. Not 7/25/08 but July 25, 2008.

• Indent, in the “Re” line, both the category names (e.g., policyholder, policy number, date of loss, etc.) and the information within the category (e.g., John Fedora, policy number 767898, July 25, 2008)

• When quoting policy, indent sub-categories. For example:

I. Policy Information about Pools
A. Pool Liners
B. Pool heating systems

• Don’t use an ampersand in phrases such as “Mr. and Mrs. Jones.”
Save the ampersand (&) for company names requiting it (e.g., H & R Block).

2. Eliminate Unnecessary Passive Language.

Instead of “We were advised by the adjuster …,” write, “The adjuster told us …”

To use passive voice, think “Who did what to whom” and your sentence will turn out passive.

3. Avoid Stuffy, Old-Fashioned Language.

Here are a few phrases to avoid:

• “coverage is not afforded for the damage”

• “please contact the undersigned”

• “due to the above policy provision”

• “at this time I refer you to Form CP 34l1 wherein it reads

• Very truly yours

• If you should have any questions, feel free to call the undersigned.”

4. Lead Readers Into and Out of Policy Language Smoothly.

Leading the reader into the policy language doesn’t mean that you just start quoting policy without preparing the reader. You’ve just summarized the claim and need to point out that the sections of the policy that address these issues are about to be quoted. Don’t just write, “On page 29 the policy states….”

5. Keep the Inside Address Simple. The address should be upper and lower case and in the form of: Person, (title and company, if applicable) street address, city, state, and Zip code.

6. Watch Your Tone.

Guard against emotional language that shows your state of mind, especially if you are feeling impatient, angry, or frustrated, such as:

“I have a real problem signing a protect payment …”

“We cannot proceed with your claim file until this information arrives.” This sentence could have been written, “Once the information arrives, we can proceed with investigating your claim.”

7. Indent Policy Language.

When you indent policy language, the eye immediately recognizes that you are quoting the policy. You may, if you choose, use another typeface to indicate policy language. If you choose to boldface, italicize or capitalize part of the policy language, you need to let the reader know by simply inserting, within brackets, your emendations (e.g., [boldface mine])

8. “Humanize” the Closing.

At times, a reservation of rights letter will conclude with a standard paragraph such as the one that follows:

Neither this denial nor any action taken in the investigation or handling of this matter on your behalf should be construed as a waiver, invalidation, prejudice or relinquishment of any of our rights or defenses under the policy. We urge you to review your policy now for important information about your coverage as well as your rights and obligations with regard to this claim. If at any time you should have questions or need an explanation of our claims handling process, please call me at _____

At some point, this language was accepted in a court of law and has thus been recycled, word for word, as a way of gaining the best possible protection for the company. But with many judges urging insurance companies to have their professionals write more conversational plain English, paragraphs like these may have to be boiled down.

Ask yourself: Could a very bright teenager get the gist of what is being said in the paragraph? If not, then perhaps a typical adult doesn’t understand it, will resent, or become fearful of the language and reach for a phone to call an attorney.

A last thought: don’t settle for the stodgy “Respectfully,” “Very truly yours,” or “Sincerely yours” as a closing. Instead, go with “Sincerely” or “Regards.”

Blake is director of The Communication Workshop and offers one-day on-site seminars in “Effective Writing for Claims Professionals” throughout North America. E-mail at garyblake@aol.com. Phone: 516-767-9590. Web site at www.writingworkshop.com.

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