Most car accident cases between the injured party and an insurance company settle out of court. Once the case is settled you will be asked to sign a release form or settlement agreement form. There are two types of releases: 1) general release and 2) limited liability release. A general release releases the responsible party (including your own insurance company) and their insurance company from any further liability related to the accident. A limited liability release will keep your options open to pursue other insurance available, including your own uninsured motorist coverage. But before you sign any documents to settle a car accident claim, you should know your legal rights.
What happens if you want to sue for more money after signing the settlement agreement? Are there advantages to settling the case instead of taking it to trial?
Read on to learn about things accident victims should consider before signing a car accident settlement agreement form.
What Is a Car Accident Settlement Agreement Form?
A car accident settlement agreement form is a document agreeing to:
- Resolve the parties' differences with each other
- Dismiss personal injury claims
- Release the opposing parties from liability
Settlement agreement forms are also sometimes called releases or waivers. A settlement agreement becomes enforceable upon signing by both parties.
The most typical settlement agreement involves an insurance company compensating the injured party in exchange for releasing the insurance company and the driver who is at fault from all responsibilities arising from the car accident.
The agreement should include the following information to make it valid:
- Details of the accident: The agreement should contain the date and location of the car accident.
- Claims: The form should contain the insurance claims (i.e., bodily injury, financial losses, property damage, and noneconomic damages). It should identify whether the form is releasing the party of all claims or only certain claims. In some cases, insurance companies will make separate agreement forms for bodily injury and property damages.
- Parties: The form should specify the identities of the parties, including the at-fault driver.
- Payment: The form should state the settlement amount the insurance company is paying in exchange for the release of your car accident claim.
When to Sign a Car Accident Settlement Agreement Form
If you've been injured as a result of a car crash, there are several factors you should think about before signing a settlement agreement form. Here are some guidelines to help you make an informed decision.
Complete Medical Treatment
Wait until your medical treatment is complete and your condition is stable. This will give you a better understanding of the extent of your injuries and any long-term effects. To the greatest extent possible, try to anticipate any future medical bills you will need to pay, including physical therapy, time off of work, and any long-term physical or mental health issues you may experience. Include that amount in your negotiations. Once you sign the settlement agreement form, you cannot go back and sue for more money, even if your medical bills continue to pile up.
Consider Future Injuries
Don't overlook the possibility that you may experience additional injuries or complications later. Therefore, make sure that future medical expenses and other damages like lost wages are included in your settlement amount.
Before signing any settlement agreement, have an experienced personal injury lawyer review the terms. An attorney can ensure the terms are fair and in your best interest.
An attorney can help you:
- Understand your rights
- Negotiate a better settlement
- Advise you on whether the settlement offer is reasonable
Evaluate the Initial Settlement Offer
The initial settlement offer from the insurance company is usually lower than what you may be entitled to. An experienced attorney can help you assess the offer and determine if it adequately compensates you for your:
- Lost wages
- Pain and suffering
- Other damages
Understand the Settlement Agreement
If the settlement agreement is a general release, it will release the responsible party (including your own insurance company) and their insurance company from any further liability related to the accident. If it is a limited liability release, it will keep your options open to pursue other insurance available, including your own uninsured motorist coverage. Make sure you understand the implications of signing the agreement and that all your concerns and future needs are addressed.
By taking these factors into account, you can make an informed decision about when to sign a car accident settlement agreement form.
Can I File a Lawsuit Instead?
Once the insurance company makes its highest offer, it is up to you to accept or reject it. While you may think a court would compensate you with the largest amount, that is not true in most cases.
There are several advantages to settling a claim through an agreement:
- It involves fewer costs because you can avoid any litigation and court fees.
- If you and your lawyer take the case to court, the defense counsel may notice weaknesses in your case that the claims adjuster of an insurance company is less likely to be aware of.
- You can avoid the stress of litigation, which often involves a longer time frame than settling a case.
Yet, in some situations, it may be necessary to take the case to court. If the insurance company is being unreasonable, you may want to skip the settlement process and take your claim to court. Or if your case involves serious injuries or the death of a person, your case may involve complex issues that require court action.
Do not sign anything if you disagree with any of the terms on the settlement agreement form. You can always seek mediation or alternative dispute resolution to resolve any disputes. If you and the other party are unable to come to an agreement, you should then consider filing a lawsuit.
In a personal injury case, additional compensation can be sought for:
- Personal care
- Loss of enjoyment of life
- Out-of-pocket expenses
- Changes in your quality of life
If you believe the settlement offer does not adequately cover these aspects, you may consider filing a personal injury lawsuit.
Keep in mind the statute of limitations, which is the time limit within which you must file a lawsuit. Consulting with a personal injury attorney is essential to ensure you understand your rights and the value of your claim.
When evaluating a settlement offer, consider the following:
- Legal advice: Get legal advice from a personal injury attorney who can help you understand the potential outcomes of a lawsuit, as well as the risks and benefits of pursuing additional compensation.
- Insurance policy: Review the insurance policy to determine the available coverage and potential limitations.
- Counteroffer: If you believe the settlement offer is too low, work with your attorney to make a counteroffer that reflects the true value of your claim.
- Legally binding contract: Remember that a settlement agreement is a legally binding contract. Make sure you fully understand the terms and conditions before signing.
By carefully considering these factors and seeking the advice of a personal injury attorney, you can make an informed decision about whether to accept a settlement offer or file a lawsuit to pursue additional compensation for your car accident injuries.
Get a Legal Claim Evaluation
In a car accident claim, insurance companies do not always give you the best offer in the initial phase of negotiation. It's often easy to overlook important factors that give you a better chance of receiving a fair settlement offer.
Keep in mind that there are two types of releases. Signing a general release means you are waiving all future claims related to the accident while signing a limited liability release keeps additional claims against insurance companies open. If you are considering settling a claim or have received a settlement offer, talk to a car accident lawyer before signing a release or settling.