Courtesy of AllLaw.com
If you’re involved in a car accident and you’re entitled to compensation for your injuries and other losses, the car insurance company of the driver who was responsible for causing the wreck may contact you to try and settle the claim.
Your first reaction to a settlement offer may be a relief. Now you’ll get money to pay for your medical bills, and to get your car fixed and back on the road, all without having to hire an attorney and file a lawsuit.
But don’t get too carried away, because you’ll also have to sign a document called a “release” before the car insurance company sends you any money.
What exactly is a release and what is the legal impact of signing one?
If the car insurance company offers to settle your accident claim, there are a few things you need to keep in mind before signing the all-important release.
There Are Two Types Of Releases:
1. Property Damage Release-Car Damage
2. BI Release-Bodily Injury
What Is a Release?
A release is a legal document in which an individual agrees to give up, or release, certain legal rights. A release is also sometimes called a waiver. The purpose of the release is to end a legal matter (such as a civil lawsuit) and allow the parties to move on.
In the case of car accident claims or lawsuits, a person who signs the release gives up the right to sue certain individuals or entities as they relate to the specific accident. This means, if you sign a release from the other driver’s car insurance company, you will shield the insurer and its driver from any further legal action arising from the accident. In return, you’ll receive a settlement check.
Bodily Injury Settlement
In the typical settlement of a bodily injury claim, the injured person receives money as compensation for their injury. In return, the injured person agrees to release the paying party from further liability for that injury and to terminate any lawsuit that has been filed seeking damages.
Bodily Injury Release
The release agreement is actually a contract that eliminates all claims of the injured party as to the parties released. It is critical to have an experienced personal injury attorney evaluate the full extent of your injuries. This forever ends your injury claim.
Florida is a “diminished value” state, which means you may be entitled to the diminished value of your vehicle after an auto accident. “Diminished Value” is the loss in market value that occurs when a vehicle is wrecked and repaired.
Things To Consider Before Signing A Release:
When you receive the release from the car insurance company, do not sign it until you have taken the following five things into consideration.
1. Consult an attorney about your claim and go over the release.
Not only will an experienced attorney be able to explain exactly what the release says and answer any questions you may have, but there may be certain legal rights you aren’t aware of that will vanish if you sign the release. Your attorney will point these out for you.
For example, let’s say you confirmed with your doctor that the car insurance company’s settlement amount is enough to pay for all your medical bills. But you may have valid claims for other losses that you may have overlooked or failed to consider, such as lost wages or pain and suffering. You won’t know for sure unless you have an attorney review the release and ask you the right questions.
2. Before signing the release, obtain permission from your car insurance company.
You may need your car insurance company’s permission before signing the release. This is due to a legal concept called subrogation, which is very important in car accident cases, especially underinsured motorist cases. Here’s how it works.
Imagine you’re involved in a car accident with another driver whose car insurance policy limits aren’t enough to fully compensate you for your losses. If you have underinsured motorist coverage, your car insurance company should make up the difference, up to your UIM limits. Your car insurance company will then use the subrogation provision in your car insurance policy to recover (or, more realistically, attempt to recover) the difference directly from the other driver.
Subrogation is how your car insurance company uses your legal right to pursue the other driver for reimbursement for the underinsured coverage payment it just made to you.
However, should you sign a release without your car insurance company’s permission, your car insurance company’s ability to go after the other driver is now gone? As a result, your insurance company may try to deny your underinsured motorist coverage claim.
3. Make Sure You Understand What You’re Signing.
Legal documents can be intimidating, and you may feel like there’s no point in reading the release if you won’t be able to understand it. However, you will probably understand more of it than you might think, especially the most important terms, such as the settlement amount and the details of the settlement payment.
Additionally, don’t take the word of the car insurance company’s representative as to what the terms of the release are. Always check it over yourself to make sure there are no misunderstandings.
4. Ensure that the settlement funds cover all injuries and damages.
Just because you feel fine and all your medical bills are fully covered by the settlement check, doesn’t mean you have been fully compensated. Many injuries from car accidents aren’t discovered until a period of time after the crash. The last thing you want to do is agree to a settlement of $20,000 for medical bills when a month later it turns out you need another $10,000 in medical treatment for injuries that have only recently presented symptoms.
REMEMBER THAT ONCE YOU SIGN THE RELEASE, YOU CAN’T GET ANYTHING ELSE FROM THE OTHER DRIVER OR THE OTHER DRIVER’S CAR INSURANCE COMPANY.
5. Determine if anyone else could be responsible for the accident.
This tends to be an issue when more than one person or entity is responsible for the accident. For instance, let’s say you have a release that only applies to a commercial truck driver that hit you. The settlement amount isn’t enough to fully compensate you, but you’re not sure if you should reject the release and file a lawsuit to try to recover the full amount. If it turns out that you have legal claims against the commercial truck driver’s employer and another individual driver, you might be more willing to sign the release.
The decision to sign the release will depend on a variety of factors and circumstances. Make sure you have the whole picture before you make your decision.
Joe Zarzaur is a Board Certified Civil Trial Attorney whose firm is dedicated to promoting community safety since 2007. ZARZAUR LAW’S AREAS OF PRACTICE: Serious Personal Injury, Product Defect, Auto Accidents, Cycling Accidents, Motor Vehicle Accidents, Products Liability, Wrongful Death, Community Safety, Boat and Jet Ski Accidents, Slip and Fall Injuries, and more. Licensed in Alabama and Florida.
It is also important to consult with a Board Certified Trial lawyer who has the knowledge and experience to help you. We know accidents can be stressful and want to make the process as easy as possible for you. Call Zarzaur Law, P.A. today at (855) Hire-Joe for a free legal consultation or visit www.zarzaurlaw.com.
If you’ve been the victim of an auto accident, it’s important that you don’t make any rash decisions. Put yourself in the best possible position to receive the justice you deserve. It is also important to consult with a Board Certified Trial lawyer who has the knowledge and experience to help you. We know accidents can be stressful and want to make the process as easy as possible for you. Call Zarzaur Law, P.A. today at (855) Hire-Joe, or by requesting a free case review through our website.