If an insurance company does not honor their own settlement agreement, does that void our settlement offer?

About 5 months ago, my husband and I were involved in an auto accident. We negotiated a settlement agreement ourselves and the company sent us an agreement to sign. We signed it for a certain dollar amount. Today we received a check for $1500 less than the settlement we agreed upon. Does this void our agreement since they are not honoring the original agreement?

Asked on June 4, 2012 under Personal Injury, Texas


B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Usually not.  What it can do is give you a basis for filing a claim to enforce the contract.  The contract will control what your rights are to enforce the agreement.  So, that's your first step.  If for some reason the contract does include a provision for voiding the contract for non-payment, then you could "void" the contract--- but considering that the insurance company probably drafted this agreement, it's not likely to be in there.  A second option is to contact the state insurance board.  You may have a claim agains the insurance company for willfully refusing to pay on the claim.  A third option is to have an attorney to review all of your paperwork to file suit against the insurance company.  They will need to see the contract and all of the documentation that lead up to the contract being signed.  You may not be able to void the contract, but you may be able to pursue other punitive measures for their non-compliance.

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