If you are involved in a car accident, you are legally entitled to seek compensation for any injuries, as well as the pain and suffering caused by the accident.
The settlement might be from the insurance company of the at-fault driver, or it could be from your insurance company. This hinges on who was at fault for the accident.
The insurance provider could offer you a settlement at any time after the car accident.
Insurance settlement agreements are also referred to as release agreements. These are legally binding documents. Signing a release agreement and accepting a compensation check means you forfeit the right to seek any further compensation for these injuries and damages.
Receiving one of these insurance settlement agreements – especially if you are struggling financially – can be a tempting proposition. You might feel you will save yourself the time and cost of filing suit and retaining an attorney.
Bear the following pointers in mind:
1. Once you sign this release agreement, you are creating a legally binding document.
2. This release agreement is liable to be more beneficial to the insurance carrier than to you, the injured party.
Most insurers initiate proceedings with a low initial settlement offer. If the company can obtain a signed agreement for this lowball offer before the claimant fully grasps the value of their claim, the insurance company saves a great deal of money.
Keep in mind that the initial offer you receive from an insurance company does not constitute a final offer. Often, submitting a counteroffer can generate a more reasonable settlement offer, allowing you to avoid filing a lawsuit while still getting the compensation you deserve.
Get To Know Your Insurance Policy
Even if your settlement agreement is not dependent on your insurance policy, the policy can still affect the outcome.
You should determine whether your auto insurance covers the following:
- Rental vehicles
- Aftermarket upgrades (sound systems, oversize tires)
- Replacement value when the vehicle is totaled
- Verified pre-accident condition of your vehicle
- Bodily injuries and associated medical bills
- Replacement value if your vehicle is totaled
- Lost income
A car accident settlement agreement is a formal document. The aim of this form, sometimes called a waiver or release, is to resolve the differences between the two parties. The document also releases the opposing parties from liability. When this agreement is signed by both parties, it becomes legally enforceable.
Standard settlement agreements involve an insurance company compensating an injured party in exchange for the company being released from all subsequent responsibilities stemming from the accident.
To ensure a settlement agreement is valid, include the following:
- Full details of the accident, including date and location
- Identities of all parties involved
- Claims: bodily injury, property damage, noneconomic damages. Specific whether the form releases the opposing party from all claims or certain claims. Bodily injury and property damages are often detailed in separate agreement forms
- Amount of payment in exchange for release of claims form
Itemize All Damages
List all the damages you have sustained as a result of the accident, as well as an approximate value for each.
If you are looking to have items lost or damaged in the accident replaced, find out whether the insurance company only offers depreciated value.
Keep all original receipts and bills. Make copies for the insurance company. Never surrender original documentation to the insurer.
Remember that you are unable to collect for the same loss twice. You either deduct the payment from the insurance company from your settlement or you repay the insurer separately. This process is known as subrogation and does not allow for out-of-pocket costs.
Think of Both Short-Term and Long-Term Costs
All the out-of-pocket expenses you face immediately after the accident are considered short-term costs.
Long-term costs of the accident are usually medically related conditions and effects that persist long after the accident.
If you have injuries requiring long-term medical care, rehabilitative therapy, or physical therapy, ask your healthcare provider for an estimate. Determine whether or not your insurance company will meet these expenses. If not, you should investigate working them into a final settlement.
Carefully Review the Document
The foundation of a car accident settlement agreement, then, is a release of all further legal liability. You will promise not to sue the other party for this accident, and you will normally also agree to keep the settlement details private.
Agreements should include:
- Name of at-fault party
- Your name releasing the right to further action
- Date and location of accident
- Money owed in exchange for release
- How much time the insurance company has to release payment
Check that all personal information and contact details are accurate and complete.
Consult an Attorney Before Signing a Settlement Agreement
When you sign a car accident settlement agreement with an insurance company, it becomes a legal contract. You will be relinquishing any further right to legal action or compensation, so you should consult an experienced personal injury lawyer before agreeing to signing a release in return for a check.