A reservation of rights is issued by an insurance company when?

A) When it needs to defend the insured but wants to have an opportunity later to decide if the accident is beyond coverage of insurance policy
B) When the amount of injury exceed the policy limit
C) When there is a third party involved from a different state
D) When an insured misses payment on a premium

Reservation Of Rights

A declaration by an insurer that provision of defense or coverage for a claim is not a waiver of their right to deny coverage later on grounds not yet known.

Coverage Of Insurance Policy

The specific risks, events, or damages that an insurance policy agrees to cover, including the limits and conditions.

Premium

The amount paid for an insurance policy, or the cost to acquire an option or financial instrument.