However, when a legitimate question of coverage exists, it will often be to the insurer's advantage to file a declaratory judgment action. The United States District Court's look at whether a party that is not an insured may seek a declaration regarding an insurer's duties under its policy.Consequently, an insurer's failure to send a reservation of rights letter, standing alone, is not a waiver of the insurer's right to deny coverage for a claim. An action or proceeding is not open to objection on the ground that a declaratory judgment or decree is prayed for. To establish federal jurisdiction in a declaratory judgment action, two conditions must be satisfied. First, is the constitutional inquiry. The above referenced declaratory judgment action seeks a determination of Plaintiff Indian Harbor Insurance Company's. Novel Insurance Coverage Issue? File a Declaratory Judgment Action in Federal Court, Right?