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  • Writer's pictureRobert Schuerger II

What Is a Release in a Settlement? Everything One Should Know

Most car accident claims get settled out of court because the attorney who represents the injured victim will negotiate with the insurance company of the at-fault driver. In the settlement, the insurance company will agree to pay a specific amount of compensation, though it often requires a "release" of any legal liability. No other legal action can be taken against the insurer.

The injured party will then get a check for their medical bills and other expenses after giving up their right to take more legal actions against the at-fault driver and that insurance carrier. It is pretty straightforward, but the specific conditions and terms used to resolve the claim could vary.

Therefore, it's wise to seek legal counsel from a reputable lawyer. They will carefully analyze the language within the release agreement before it's signed. Consider calling Schuerger Shunnarah Trial Attorneys to request a free legal consultation or use the online form to get started. They can also help with questions like what is personal injury fraud?

Quick Facts

Quick Facts

Here are some quick facts about a settlement release agreement:

  • In the car accident settlement, the insurance company will agree to pay some compensation after the victim submits the claims form. However, this is in exchange for a release of any other legal liability.

  • The injured party will receive a check, but this means they give up their rights to pursue further legal action against the insurance carrier and the at-fault driver for their damages.

  • Before signing a release agreement, the victim should fully understand the extent of their injuries and the costs incurred. Likewise, they should know the legal consequences of that release agreement.

  • Once they sign the settlement release agreement, the insurance company must process the payment, issuing the check as soon as possible. This means the victim cannot pursue further compensation at a later date.

Consider These Issues When Negotiating the Terms of the Settlement Agreement

When it's time to negotiate the terms of the settlement agreement, the victim and personal injury attorney in Indianapolis IN should consider these issues:

Broad or Narrow Release

The victim could have more than one claim, or it could be against multiple parties involved in the accident. Therefore, they should consider the specific claims to release as part of their settlement agreement and ensure the terms capture that scope of release perfectly.

Release Unknown Claims

Sometimes, the injuries and expenses relating to the accident aren't known until later. If the victim signs the release to include unknown claims, they cannot pursue additional compensation for those costs in the future.

Who Pays Fees/Costs

The parties who use the settlement agreement option will typically pay their own attorney fees. However, they might share certain other costs.

How/When the Settlement Payment Happens

When a settlement is reached, the victim should get a check within a few months. However, payment could take longer if it involves an incapacitated adult or a child.

Who Can Know About the Settlement Agreement?

Typically, settlement agreements will have a provision explaining confidentiality obligations. The parties must agree to keep the settlement terms confidential. This means the victim cannot tell their friends and family members how much money they received.

Enforceability of the Release Agreement Under State Law

Victims must understand the jurisdiction that will apply to their case because the release agreement has to comply with those state laws. Some provisions might be permitted in one state but not in another.

What Are Settlement Agreements?

Settlement and release agreements are enforceable contracts between parties involved in a legal dispute. It terminates the liability claim in exchange for compensation up to a certain amount. The conditions and terms of the agreement will state what's settled between the two parties. Likewise, a party could be held liable for claims not specifically outlined within the release provisions.

Typically, a settlement release agreement states the parties being released, the payment amount, and the claim or claims being released. These can include property damage, bodily injury, and pain and suffering. Before signing, the victim should fully understand the extent of their injuries and the costs associated with them. There could be legal consequences within the release agreement.

Once the victim agrees to release the other party from a liability claim, they cannot get more compensation from them at a later date.

What's Included in the Settlement and Release Agreement?

The conditions and terms of a settlement and release agreement could vary based on the case. However, the document signed will generally include these things:

  • Identification of the injured party (releasor) and the responsible party (releasee), including addresses and names

  • A summary of the full legal dispute

  • Responsible party released from any future payments

  • Specifics of the claim that were covered by the agreement and what, if anything, is excluded

  • Explanation of payments

  • Injured party giving up their right to sue later

  • Confidentiality provision

  • Non-admission of guilt

  • Statutory law that governs the agreement

Who Will Review and Sign the Personal Injury Settlement Agreement?

Usually, the attorney who represents the insurance company of the at-fault driver will prepare the settlement release agreement. Then, it is sent to the injured victim or their lawyer for review. If the lawyer claims the terms are unacceptable or not in their client's best interest, they object to it and will negotiate to make appropriate changes.

For example, the attorney could object to the settlement if it doesn't account for all the damages to the victim.

When the agreement is deemed acceptable by both parties, the victim will sign it while a notary public watches. After signing it and returning it to the at-fault driver's attorney, the conditions and terms are finalized and could be legally enforced.

The victim might have to file for an underinsured motorist claim under their policy. This will happen if the at-fault driver doesn't have enough coverage to fully compensate for the victim's losses. In this case, the victim will generally require permission from their insurance company before they sign the release. Otherwise, the insurer could deny the claim.

Why Does an Insurance Company Use a Settlement and Release Agreement?

Insurance carriers have a duty to protect the insured person from legal claims arising from an accident. The release of claims is one type of liability waiver. Therefore, the victim cannot request additional compensation through another negligence claim once they accept that settlement and sign the agreement.

When an insurance company requires release agreements in exchange for payment, the carrier ensures that the victim cannot file lawsuits against the company or the insured person in the future.

Can One Get a Settlement Without Signing the Settlement and Release Agreement?

Many insurance companies won't agree to pay a settlement until the victim signs a release form.

Suppose the victim wishes to pursue portions of the claim once the settlement is finalized. In that case, the lawyer must negotiate with appropriate language that excludes those portions or claims from the agreement before it's signed.

What Will Happen When Everyone Signs the Settlement Agreement?

After signing a release agreement, the lawyer will send the document to the insurance carrier's defense attorney. Then, the company must process the payment as quickly as possible, issuing a check to the victim.

In cases where the settlement involves incapacitated adults or children, the claim must go through probate or state court. Otherwise, the victim or their attorney will receive the check within a few months. If there's no payment in that time frame, the attorney will contact the insurance carrier to find out the reason for the delay.

The settlement agreement is a binding contract. Therefore, the attorney could file a lawsuit against the other party if they do not pay in a timely manner according to the document terms. Schuerger Shunnarah Trial Attorneys can give more information on what is duty of care in personal injury law?

The Elements of a Settlement and Release Agreement

The Elements of a Settlement and Release Agreement

Each settlement and release agreement must be examined thoroughly to ensure it is complete and fair to both parties. Generally, most will have these sections:

  • Recitals - This explains the dispute and establishes that the parties involved reached a settlement.

  • Warranties and Representations - Warranties are the promise of fact, while representations are statements of fact.

  • Indemnification - This involves a party compensating the other party for specific expenses and costs.

  • Mutual Release - A mutual release will prevent both parties from pursuing claims against each other.

  • Notice - This offers information about the notices required by law and how they're delivered.

  • Entire Agreement - This clause will try to exclude statements and representations either party might make when they entered into the contract, even if they weren't incorporated into it expressly.

  • Venue, Governing Law, and Jurisdiction - This will determine the state laws used to settle the dispute and where it is to be resolved.

  • Counterparts - This section focuses on each party signing identical copies (though different) of the same contract.

  • Interpretations - This section provides that the agreement isn't construed more strictly against one party or another.

Contact a Lawyer for a Free Consultation

After being injured in a car accident, victims should talk to an experienced personal injury lawyer before signing a release agreement to ensure their rights are fully protected.

Schuerger Shunnarah Trial Attorneys can help with a victim's personal injury claim. Please call or use the online contact form to request a free consultation with a lawyer today!


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