Rarely do personal injury claims end in a trial. Most personal injury lawsuits result in settlement agreements.
A settlement is an arrangement between the two parties that resolves a dispute. This allows both parties to avoid the time and high costs of a trial.
Usually, settlements result in the at-fault party (or their insurance company) providing payments to the victim. The specifics of these arrangements are laid out in the terms of the agreements.
A settlement agreement is a contract that details the resolution of the dispute. These contracts specify the amount of money that the victim will be paid. They also detail the legal rights relinquished by the victim once the payments are agreed upon.
If you have been injured in a car accident, speak with a personal injury attorney as soon as possible. A skilled lawyer will advocate for your best financial interests. They will help you fight for a settlement that works for you.
In the following post, we will examine five things you should know about car accident settlement agreements.
Table of Contents
1. Settlement Agreements Are Binding
When both parties are planning a settlement, they will have an agreement drawn up. Once the relevant parties sign the settlement agreement, it is final.
Settlement agreements are legally binding contracts. The language of the agreement should make this fact clear.
Sometimes, one of the parties will sign an agreement prematurely and regret their decision. But once a settlement agreement contract is signed, there is almost no way to get out of it.
Therefore, it is crucial to secure legal representation before you sign anything. An accomplished personal injury attorney will read a proposed settlement agreement carefully to ensure that it is in your best interests.
Oftentimes, insurance companies will offer victims a lowball settlement following a car accident. The company hopes that you will settle for less money than your accident or injuries may be worth.
Never sign a settlement agreement unless you are certain that it will provide you with all the compensation you deserve.
2. Settlement Agreements and Release
When a settlement agreement is drafted, it includes something called “release.” In fact, these contracts are sometimes called “settlement agreement and release.”
“Release” refers to the legal rights and claims that you give up when you sign a settlement agreement. This is one of the most important parts of the agreement for the party that is paying the settlement.
Most defendants in car accident cases want the release to cover all of the legal claims related to the collision. This includes both current and future claims.
In other words, most settlement agreements protect the defendant against any future legal claims that you might make regarding the car accident.
Suppose that you learn that your car accident should have been worth much more than your settlement agreement provided because of strict liability statutes. If this happens, you will have no legal recourse to secure money based on that potential claim.
Put simply; a settlement agreement release means that you cannot pursue additional legal claims related to the accident.
3. Settlement Agreements and Unknown Injuries
Settlement agreements release a defendant from all claims related to the injury accident. This means that a settlement agreement might not cover future treatments for your injuries if you sign the settlement before you’ve fully recovered.
For example, suppose that you sign a settlement agreement following a truck accident, and it relieves the defendant from injury-related liability. You later learn that the collision caused a significant back injury that you were unaware of at the time.
Because you signed the settlement agreement, you will be unable to take any action to secure further compensation. This is true no matter how much your future medical treatments may cost.
Once the settlement agreement has been signed, the defendant wants to be sure that the claim is over. Rarely will a settlement agreement leave space for you to assert claims or injuries in the future.
4. Settlement Agreements and Other Parties
Some settlement agreements include even more restrictions. Some of these contracts prevent you from pursuing compensation from certain parties other than the defendant.
In other words, some settlement agreements release other parties from any claims you might make related to the accident. These parties should be named clearly in the contract.
Some victims are captivated by the prospect of a quick payment. When this happens, victims may sign a settlement agreement without fully understanding it. This can result in a significant loss of potential financial recovery.
For instance, a settlement agreement may say that you release any claims against Company B and Person C if you accept payments from Insurance Company A.
Signing away your rights in this type of agreement should only be done with a full understanding of the consequences.
If you have suffered a car accident because of another person’s carelessness or recklessness, speak with a personal injury attorney. A legal professional can represent you in all settlement negotiations.
5. Insurance Companies Work Against You
It is important to understand that insurance providers are not on your side. Insurance companies are incentivized to pay the least amount possible on each claim.
Never sign a contract drafted by an insurance company without speaking to a qualified personal injury lawyer. A contract is always written to favor the party that drafted it.
In the aftermath of a car accident, do not sign a settlement agreement written only by the insurance provider. These standardized contracts will contain the broadest release possible.
If you sign an agreement like this, you will be giving up any possibility of future compensation.
Settlement agreements from insurance providers may also make it challenging for you to dispute the company’s claims by:
- Providing full payment discretion to the company
- Including mandatory arbitration clauses
When you secure the services of a personal injury attorney, insurance companies will likely take your claim more seriously.
Do not let an insurance company off the hook with an insufficient settlement. Speak with a qualified legal professional. At Mission Personal Injury Lawyers our experienced attorneys can help you with your case. Please contact our law office in San Diego at (619) 777-5555 to discuss your personal injury case.