In what situation is a non-waiver agreement most often utilized?

A non-waiver agreement is commonly utilized in situations that involve complexities or potential disputes regarding liability, particularly during claims handling when catastrophic events occur. Catastrophic events often lead to large volumes of claims and can complicate the insurer’s assessment of liability. In these circumstances, the insurer may require a non-waiver agreement to protect against the policyholder claiming that their rights were waived while the insurer investigates the loss.

This agreement allows the insurer to investigate and process the claim while still preserving the right to deny the claim based on the findings, should it become necessary. It clarifies to the policyholder that even though the claim is being processed, all rights are being preserved, which is crucial when dealing with complex claims that may lead to disputes later.

Using a non-waiver agreement is less relevant during routine claims processing, adjusting policy limits, or when transferring coverage, as these situations typically do not involve the nuanced liability questions that would necessitate such an agreement.