Once you have reached a settlement agreement with an insurance company, you may wonder if you still have the option to sue. The short answer is that it depends on your case’s specifics and the settlement agreement’s terms. However, it is generally uncommon to sue after reaching a settlement.
Insurance companies want something in return when they write you a check after a settlement agreement, which is to close the claim from their books once and for all. They want certainty that they are not making an open-ended commitment to pay you when they have assumed liability for an accident. Accordingly, insurance companies will demand that you sign an agreement containing a release clause as a condition of paying you. Remember to pay attention to the critical importance of a release and the function it performs.
Once you have signed a release, you cannot ask for more money in the future because you are freeing insurance companies from any future liability in connection with your claim. They have written you a check; their only obligation is to settle the claim for their policyholder.
Always take it very seriously when you sign a release agreement because some people only know what they have signed once it is too late. Before accepting a settlement offer, it is crucial to carefully review the terms and consult a personal injury attorney. An experienced Bakersfield personal injury lawyer can analyze the agreement to ensure it adequately compensates you for your damages and covers any future medical expenses or ongoing treatment. They can also explain if any restrictions or conditions in the settlement can prevent you from suing in the future.
Understand the Legal Process Before You Sign Anything
Before signing a settlement agreement, you should understand more about the process and what it entails. You have either filed a claim or lawsuit that the insurance company has defended. At some point, you and the insurance company will agree on the total compensation you will receive—however, more needs to happen before you can deposit the check into your account. One of the first things that must occur is that you and the insurance company must memorialize your settlement agreement and make it binding.
Insurance companies may even try to rush you into signing a settlement agreement when they know that you do not have a lawyer. They want your signature on the dotted line, so you cannot return to them for more money. In the meantime, insurance companies will benefit because they have paid you pennies on the dollar for your case, and you have sacrificed your legal rights for far less than they are worth.
You Need to Sign an Actual Settlement Agreement Before You Get Paid
A settlement is an agreement between you and the insurance company, and it is a binding legal contract that both sides must follow when it is signed. In contract law, a legal principle says that you and the insurance company have a consideration. Each party promises that they will do something or agree not to do something.
In a personal injury settlement agreement, the insurance company writes you a check for your damages, but that payment does not come without a cost. Ordinarily, you will have a legal right to total financial compensation when you prove that someone else was negligent.
A Settlement Agreement Will Always Contain a Release Clause
In a settlement agreement, you give up the right to further compensation for your injuries. You get a one-time payment (a lump sum or a structured settlement). As part of the settlement agreement, you must agree to a release clause that waives any future right that you will have to come back for more money. If, for some reason, you do not get enough money in the initial settlement, you cannot seek more money from the insurance company in the future.
The exact language of the release clause matters. A sample release clause may read like the following:
“I agree to the terms of this Agreement, and I am voluntarily signing this release of all claims. I acknowledge that I have read and understand this Agreement, and I understand that I cannot pursue any of the claims and rights that I have waived in this Agreement at any time in the future.”
The agreement must clearly spell out the exact claims that you are waiving. You do not want to waive other rights to sue that may not have arisen from the specific accident at issue. If the release cause has broadly worded terms, it can take away some of your legal rights and cost you money.
Release Clauses Are Agreed to By Both You and the Insurance Company
Your personal injury attorney will review the language of the release clause that the insurance company proposes. Insurance companies do not have the power to dictate any language in a settlement agreement, and your attorney may review the terms and suggest some changes. It can take time to compromise on the language, even after agreeing on the money.
Eventually, you will have a specific legal agreement that you and the insurance company will sign. It will pay you money in satisfaction of your legal claim, and you will continue to honor the terms of the settlement agreement in the future.
Release Clauses Prevent You From Suing in the Future
The release clause prevents you from suing or filing a claim in the future. If, for some reason, you did try to file a lawsuit, insurance companies will use the release agreement as an affirmative defense that they will include with their answer. A judge may dismiss the case entirely if there is no actual factual or legal dispute about the terms of the release.
There may be a question about whether the release clause is valid. For example, you may not have known the extent of your injuries due to the defendant’s fraud. However, if you did not know about your own damages because you did not take the time to learn them before settling your claim, you will be out of luck.
There Are Only a Few Reasons Why an Insurance Company Cannot Enforce a Release Clause
There may be some limitations to a release clause that can keep the particular language you signed from being enforceable. The release clause can overreach by doing the following:
- Including a clause that will be against the law or void against public policy
- Overreach to the point where it is an unconscionable one-sided agreement in favor of the insurance company
- Contain very vague language about unspecified future claims that you may be waiving
The release clause may also be invalid if it contains fraudulent assurances or assumptions. For example, suppose the insurance company actively concealed a material fact in settlement negotiations. In this case, fraudulence compromises the agreement, and the insurance company cannot enforce the release clause.
You Need to Get Enough Money Before Signing a Release
The release clause is precisely why you must be 100 percent sure that the settlement agreement you are signing compensates you for your injuries. In practically every circumstance, the release clause is valid, and you will be out of luck if you want to return for more money. While it is theoretically possible to overturn a release agreement in court, you have a very steep hill to climb, and you will likely fail.
You may run out of funds if you have not secured enough money. The last thing you want to do is use the money you have allocated for your lost income to pay your medical expenses. Then, you cannot pay your bills when your injuries leave you unable to work in the future. Medical bills can eat up your settlement funds because you will be responsible for paying these bills from your proceeds. Remember that you only get one chance to settle a personal injury claim.
Every dollar that you receive in a settlement has its own purpose. Even your non-economic damages, such as pain and suffering, should compensate you for something. You have lost something important to you, and the accident has left you unable to live the life that you did before. Your pain and suffering damages will pay you for the effects of the accident that you will be living with long into the future. If you have underestimated your damages, or you have taken less than you deserve, you will end up under-compensated for your accident injuries.
Hire an Experienced Personal Injury Lawyer to Maximize the Value of Your Claim
To have the best chance of getting the maximum possible compensation for your injuries, you should hire an experienced personal injury lawyer. First, your lawyer will perform a valuable service by helping you learn how much your case is worth in the first place. When you do not have a personal injury attorney, you will be in a position where you will need to rely on the insurance company to tell you how much your claim is worth. That is like trusting the proverbial fox to guard the henhouse because insurance companies are only motivated by saving their own money at your expense.
A personal injury lawyer will work with expert witnesses and closely review your documentation to help determine how much you may be due in a settlement. They will help you find a starting point in negotiations. Then, you will know if the insurance company needs to offer you more money. Suppose the settlement offer needs to be higher to pay you fully. In that case, a lawyer will advise you to reject the settlement offer and continue negotiating or file a lawsuit against the responsible party in court.
Your Personal Injury Attorney Can Negotiate with the Insurance Company
Your lawyer will also negotiate with the insurance company to secure more compensation for you. There is a much better chance that you will get more money when an attorney represents you. Insurance companies have much more incentive to be more reasonable with you in settlement negotiations because they know that you can file a lawsuit that can raise their business costs and leave them at risk of a large jury verdict.
To give you the best chance of maximizing the value of your claim, you should hire an attorney as soon as possible after the accident. Otherwise, the insurance company has ways to compromise your legal rights and cost you money. Your lawyer will work to investigate the cause of your action and gather the evidence you need to establish your legal right to financial compensation.
It Costs Nothing Upfront to Hire a Personal Injury Lawyer
If you are afraid that you simply do not have the money to hire a lawyer, you can stop thinking that right now. A personal injury lawyer works for you differently than other attorneys, who may send you hourly bills and ask for a retainer.
A contingency fee agreement is one of the most common arrangements for hiring a lawyer. This arrangement means your lawyer only gets paid if they successfully recover your compensation. If they are unsuccessful, you will not owe them any fees, which can be a huge relief for individuals who may not have the financial means to pay for legal representation up front.
A contingency fee agreement provides you with peace of mind and aligns the lawyer’s interests with yours. Your lawyer will work diligently to build a strong case and secure the best possible outcome for you because their payment depends on it. This fee structure ensures that lawyers are motivated to invest the necessary time, resources, and experience into your case.
In addition to the contingency fee agreement, many lawyers provide a free initial consultation, allowing you to meet with the lawyer, discuss the details of your case, and determine if they are the right fit for you without any financial commitment. During this consultation, you can ask questions, clarify any concerns you may have, and get a better understanding of the legal process.
Remember, when it comes to legal matters such as settlement agreements, it’s crucial to have the support and guidance of a qualified lawyer. With a contingency fee agreement, you have nothing to lose and everything to gain by seeking legal representation. So don’t hesitate to contact a lawyer who can help you navigate your legal challenges and protect your rights.