Don\’t ever send a Denial of Coverage letter on a controversial and unresolved coverage issue just because the insured has asked for one, no matter what the insured\’s \”excuse\” for \”needing\” one. Only send a DOC if your intent is to fully deny the claim at that point in time.
Nationwide should have sent a well-worded Reservation of Rights. Of course, that means that the ROR has to be followed up with timely investigation. But, an ROR instead of a DOC for a potentially covered loss is a lot easier to explain.
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Hard lesson to learn:
Don\’t ever send a Denial of Coverage letter on a controversial and unresolved coverage issue just because the insured has asked for one, no matter what the insured\’s \”excuse\” for \”needing\” one. Only send a DOC if your intent is to fully deny the claim at that point in time.
Nationwide should have sent a well-worded Reservation of Rights. Of course, that means that the ROR has to be followed up with timely investigation. But, an ROR instead of a DOC for a potentially covered loss is a lot easier to explain.