What action is typically taken by an adjuster when an insured fails to report a claim in a timely manner?

When an insured fails to report a claim in a timely manner, sending a reservation of rights letter is an appropriate action for an adjuster. This letter serves to notify the insured that the insurer is still investigating the claim but is reserving the right to deny coverage based on the delay in reporting.

This approach allows the insurance company to formally communicate its concerns while still collecting information related to the claim. By issuing a reservation of rights letter, the insurer is protecting its interests and maintaining the ability to explore potential coverage issues without prematurely denying the claim outright. It creates a legal record that the insurer is aware of the reporting issue, but is still considering the specifics of the claim under the terms of the policy.

In contrast, denying the claim immediately would be premature without assessing all the circumstances surrounding the late reporting. Ceasing all claims investigation would not be a responsible action, as there may still be valid aspects of the claim that need to be evaluated. Contacting the insured to gather more information could happen as part of the claims process, but it would not address the issue of the timely reporting and the insurer's concerns regarding coverage effectively. Thus, sending a reservation of rights letter is the most appropriate and standard action in this scenario.