What to Know Before Signing a Car Insurance Settlement Agreement

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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If you have been injured in a car accident, you will likely settle your car insurance claim without filing a lawsuit – even if you dispute your insurance company’s initial offer.  Before you agree to a car insurance claim settlement, you will need to understand exactly what you are signing and ensure that you are getting the maximum value from your claim.

TIP:  You can consult an attorney at any time before you sign a car accident claim settlement.  If you have questions about the settlement offer, you can inform your insurer that you would like to speak with a car accident lawyer before signing the agreement. 

What to Know Before Signing a Car Insurance Settlement Agreement

Car accident settlement agreements will close your car insurance claim.  Once you sign and accept a settlement offer, you cannot request more money later, even if additional injuries or damages become evident.  Before you sign a car insurance settlement agreement, keep the following things in mind:

  1. Know the value of your claim:  Before you agree to receive insurance money after a car accident, you will need to be confident that the insurance money satisfies the value of your claim.  Include in your calculations your medical bills, property damage, lost wages, pain and suffering damages, and any other losses you incurred. For information on how to value a car accident claim, read through the following articles:
    1. What Is Your Car Accident Injury Claim Worth? 
    2. Getting the Best Car Accident Settlement
  2. Remember that settling early favors the insurance company:  Part of the insurance adjuster’s job is to settle your car accident claim for as little as possible.  While insurance companies must treat you fairly, keep in mind that insurance companies profit by collecting premiums and minimizing claim payments.  A quick and inexpensive settlement is ideal for the insurance company, so be wary of accepting the initial offer.  For more information on working with insurance companies, read through the following articles:
    1. How to Deal with Auto Insurance Claims Adjusters
    2. How Insurance Companies Calculate Car Accident Settlements
  3. Understand the terms of your car accident settlement:  How a settlement is paid, who receives the money, and when you will receive payment are important issues to understand before signing an insurance agreement.  Before signing an agreement, be very clear on how and when you will receive payment.  For more information on the terms of a settlement, read through the following articles:
    1. What is a Structured Settlement?
    2. Should You Accept an Offer of Compromise in a Car Accident Lawsuit?
  4. Be aware of your alternatives:  Before you sign a car accident settlement, be aware of what your other options are if you decline to offer.  Car insurance disputes can be settled in mediation or a lawsuit if you would like to pursue legal options.  If you need to consult an attorney, take the time to do so.  For more information on settling car insurance disputes in court, read through the following articles:
    1. How Long Do You Have to File a Lawsuit After a Car Accident?
    2. What is the Likelihood Your Car Accident Case Will Go to Court?
  5. Be sure that there are no other damages or injuries:  Although some effects of a car accident can be difficult to foresee, you should do a thorough job of evaluating your property and physical damage before signing a settlement offer.  Consult with doctors, mechanics, and other experts as necessary to ensure that your settlement offer covers all the damages you suffered in the accident.  For more information about getting the full value of your damages, read through the following articles:
    1. Personal Injury Car Accident Checklist
    2. What You Can Recover for Property Damage in a Car Accident Claim

When you sign a car insurance settlement agreement, you cannot pursue your insurance company for additional damages.  You need to be confident that the settlement satisfies your claim by paying for all the injuries and property damage that you have suffered. 

TIP:  In very rare circumstances, typically arising from poorly written or unfair settlements, you may be able to pursue legal action after signing a car insurance settlement offer.  If you believe that you were cheated in a settlement offer, or if the insurance company is not honoring the agreement as you understood it, consult an attorney for assistance.

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