We find this argument to be without merit. Courts have traditionally held that an insurance company has no right to intervene in the liability action against the insured to seek a coverage determination.Declaration sought to determine the insurance issues and appropriate relief. On December 4, the Harrises also filed the motion for dismissal or, in the alternative, for transfer, now before the court. Encompass then filed a declaratory judgment action seeking a determination as to whether the policy for property insurance was void ab initio. To file a declaratory judgment action mount the insurer in their county ask the. Strategies for Declaratory. Federal courts are reluctant to consider novel insurance coverage issues. A declaratory judgment does not determine whether you are entitled to damagesit simply assesses your right to insurance coverage. Courts have traditionally held that an insurance company has no right to intervene in the liability action against the insured to seek a coverage determination.