Can You Sue After Accepting an Insurance Settlement?

Michael Waks

9 years ago

When you are involved in an accident, you may have a damage claim and be entitled to compensation. Auto insurers usually pay for property and injury damages caused by their policyholders. If someone else was responsible for your collision, his or her insurer will be liable for paying you. You can obtain money through a judgment in a civil lawsuit, but many cases settle outside of court.

When you negotiate a settlement, you typically come to an agreement with an insurer on how much you will be paid. You cannot sue after accepting an insurance settlement. The agreed-upon sum will be the total amount you receive, even if you realize later that your damages were more than the settlement amount. There may be limited exceptions to this general rule.

Why Can’t You Sue After Accepting an Insurance Settlement?

When an insurer agrees to provide money for your losses after a crash, there are strings attached. This is true whether your own insurer is paying or someone else’s insurer is picking up the bill.

To get the money, you must sign a waiver or release. The language of the release usually stipulates that you are accepting the settlement money as full satisfaction of all claims and will not take any further legal action against the policyholder or insurer arising from the same crash. Language differs depending on the insurer. An example from American Zurich Insurance Company demonstrates the type of language you may see in a release:

“IN CONSIDERATION of a total payment by ZURICH in the amount of Two Hundred and Fifty Thousand Dollars and 00/100 ($250,000.00), the INSURED hereby remises, releases, acquits, and forever discharges ZURICH from any and all claims, actions, causes of action, demands, rights, damages (whether compensatory, consequential and/or punitive), loss of services, expenses, compensation, and obligations towards the INSURED relating to the” [incident description].

This waiver or release is a legally binding contract. If you promise to make no further claims, you have to abide by this promise by law. The liability waiver does not give you an out if it turns out the injuries were worse than you feared – you are bound by the contract you signed.

While there may be limited exceptions if you can prove you entered into the contract due to fraud or coercion, there is usually no escape for someone who has signed a waiver absolving the person who hurt him and that person’s insurer. You have a duty to read and understand contracts you sign, and making a mistake about the extent of your injuries is not a reason for a signed agreement to be set aside.

For this reason, it is important to ensure you do not sign any settlement offers or accept any money until you have a full understanding of how badly you are hurt.

What to Do Before Accepting an Insurance Settlement

Because you are bound by a liability release when you settle an insurance claim, take steps before signing to protect your rights. Get medical attention from an expert who specializes in treating injuries similar to the ones you sustained. Have a comprehensive examination and get a full diagnosis. You may wish to have a medical expert estimate ongoing costs and expenses you are likely to incur over your life as a result of your injuries.

You should also consider whether your injuries are going to cause long-term pain and interfere with work. Expert witnesses can estimate what your lifetime earnings would have been if you had not been hurt, versus what you can earn with your impairments. Be sure to talk to career counselors or vocational experts to find out what future work options you have.

Although every injury claim is different, looking at past cases where people received compensation can also give you an idea of what your claim should be worth and whether a settlement being offered is fair.

Get Help from a Long Beach Accident Lawyer Before Accepting an Insurance Settlement

It is my opinion that you should always seek the advice of an attorney before entering into any personal injury settlement. Only a seasoned personal injury attorney has the experience to properly evaluate the fairness of the settlement offer.

Call the Law Office of Michael D. Waks at 888-394-1174 or use the convenient online contact form to schedule a free consultation. You are under no obligation and you will never pay any money unless you recover damages for your injuries. I offer bilingual services as part of my comprehensive approach to legal representation and I am available 24/7 to talk to you about your case.

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Michael Waks

Michael Waks is an aggressive advocate for people who have suffered because of someone else’s actions. Michael decided to become a personal injury lawyer when, while clerking at a legal defense firm during law school, he witnessed and was infuriated by asbestos manufacturers spending millions to avoid taking responsibility for the egregious injuries they caused. Immediately after passing the bar, Michael opened his own firm in Long Beach, CA to help the victims of personal injury accidents get every benefit owed them under the law.