The Non-Waiver Agreement and the Obligation to Sign
Q. I need my insured to sign a non-waiver agreement since the insurer needs to determine whether the property damaged when the loss occurred is indeed covered. The insured refuses to sign. What should I do?
A. It is your obligation as a claims adjuster to provide insureds with the necessary explanations to understand how their claim is proceeding. Your explanations should allow the insured to understand that the insurer is continuing to investigate, that it has not yet confirmed that the claim is allowable, and that it reserves the right to refuse compensation or to invoke exclusions provided for in the contract.
If the insured refuses to sign the non-waiver agreement, you must give him a reservation of rights—ideally in writing, or verbally. That said, you must not forget to note in the insured’s file all the information you gave him, in particular the date and the contents of the initial conversation regarding the insurer’s possible reservation of rights.
When an insurer or a claims adjuster has doubts about the cause of the loss, or regarding the insured’s statements; if they notice an aggravation of risk that was not declared; if the contract contains an exclusion or limit; or if they want to investigate further, they can ask the insured to sign a non-waiver agreement.
The non-waiver agreement shows that the insured recognizes the insurer’s right to continue its investigation in order to determine whether the loss is allowable, and thus, the right to potentially refuse the insured compensation.
If the insured refuses to sign the non-waiver agreement, you must give him a reservation of rights—ideally in writing, or verbally. This reservation of rights spells out the insurer’s position or intention, regardless of the insured’s consent.
You must at all times continue to keep the insured up to date on the investigation, the timelines, and how the claim is proceeding. Make sure to note the contents of your discussions in the client-file: a written document is tangible proof that you communicated with your client, and it facilitates record keeping. Furthermore, this best practice could be useful if the file were to be reviewed or disputed.
Remember that the reservation of rights must include the insurer’s name, the policy number and the event in question. It should be clear enough for the insured to understand that the loss might not be compensated. You must also advise the insured of potential consequences—for instance, that he might have to reimburse the insurer for payments already made to suppliers.