Insurer Reopening Investigation After Denial Subject to Reservation of Rights is Effective

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It is common practice for an insurer to deal fairly and in good faith with its insured. It is not required, however, for an insurer to give up its rights under the policy of insurance because an insured asked it to reconsider a partial denial of a claim. In Write Start Early Christian Education Center, LLC v. National Fire & Marine Insurance, Case No. 20-3456, USCA For The 6TH Circuit (November 12, 2020). The private limitation of action provision in a policy is major reason for such a suit.

ZALMA OPINION

The reason for time bars in insurance policies is to protect the insurer and the courts from dealing with stale claims where the witnesses memories are weakened if not destroyed and evidence is lost. Write Start had two years to sue National Fire. They took three and the delay could not be honored and the claims of waiver were defeated because National Fire refused to waive anything and even went so far as to advise Write Start and its counsel of the limitation period and that it refused to waive any of its rights.