Practice question

What does it mean when an insurer offers a 'reservation of rights' letter in a motorcycle accident claim?

  1. The insurer is guaranteeing full coverage
  2. The insurer is investigating and reserving the right to deny coverage later
  3. The insurer is settling the claim immediately
  4. The insurer is transferring the claim to another company

Answer: B — The insurer is investigating and reserving the right to deny coverage later

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