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Five Things to Know About Car Accident Settlement Agreements

Only 3% of injury cases receive a jury verdict. Most get settled or dismissed long before trial. According to the U.S. Department of Justice, parties reach a settlement agreement in nearly 75% of all personal injury cases.

Settlement agreements can save both parties considerable time, money, and stress. Juries can render unpredictable verdicts. Settling the case allows both parties to reach a mutually agreeable resolution to the case.

Here is some information about car accident settlement agreements.

How Settlement Agreements Work

Settlement agreements are contracts. A car accident settlement agreement usually has three parties — you, the at-fault driver, and the at-fault driver’s insurance company.

Like all contracts, each party gets something. You usually receive money. This compensation covers at least some of your damages from your car accident. 

Your damages can include:

  • Medical expenses
  • Lost income
  • Pain and suffering, if you suffered a permanent injury

The at-fault driver and the insurer get a release of claims. This means you accept the compensation in satisfaction of your claims and agree to release them from liability. This release binds you legally. If you try to pursue the released claims, the court will dismiss your lawsuit.

Before you enter into a settlement agreement, you should consider all of the benefits and drawbacks of settling your case.

Car Accident Settlement Agreements Can Happen Before Litigation

You do not need to file a lawsuit to enter into a settlement agreement. The fact that you have a legal claim against the at-fault driver will suffice. 

You pose a risk to the at-fault driver. By extension, you pose a risk to the insurance company because the insurer must cover the driver’s liabilities.

When you file an insurance claim, their claims adjuster will investigate your accident. The claims adjuster knows the strengths and weaknesses of your case. If the insurance company believes you can succeed in your claim, they will often open negotiations to settle it.

Car Accident Settlements Take Time to Negotiate

The claims adjuster will have copies of your medical records. The adjuster knows how much you paid for medical treatment and how many hours of work you missed. The adjuster has already calculated what you could win if you take your case to court. The insurer also knows that accident victims win 60% of trials.

Despite all this, the insurance company will make a low offer of settlement. Insurance companies do not work for their customers or claimants. They work for themselves. Insurance companies do not make money through generosity. They will do everything possible to push you into taking a low settlement.

They may try to drag out the negotiations. They may come up with ways of blaming you for your accident or injuries. They may deny some or all of your claims.

You need to remain patient while you negotiate your settlement agreement. You also need negotiating skills or an experienced lawyer to negotiate on your behalf.

Sometimes You Need to File a Lawsuit

Your ultimate bargaining chip and source of leverage comes from filing a lawsuit. Insurers do not like to pay legal fees for cases they will lose or settle. If you feel like an insurer has not negotiated in good faith, filing a lawsuit can jumpstart negotiations.

Before you file a lawsuit, you should probably hire a lawyer to evaluate your case. You might have weaknesses in your case that you did not see. Your case might have a much lower value than you expected. In either case, a lawyer can help you evaluate the strength of your claim and whether you can get better settlement offers by filing a lawsuit.

If you file a lawsuit, you can settle your case any time before the jury returns a verdict. The insurance company could even settle during pre-trial proceedings.

If the insurance company believes that the jury will not find in its favor, it can settle during trial. Insurers sometimes even settle while the jury deliberates their verdict. 

Keep in mind that juries often sympathize with accident victims. Insurers often face a risk of large damage awards when injury cases reach juries.

Settlements Have Many Benefits

A claim settlement provides many benefits:

  • A settlement is quicker than a trial
  • There is less uncertainty with a settlement
  • Each party has more control over the outcome of a settlement

You might need to accept less than you hoped. But insurance companies do not pay windfalls for injury claims. You should aim for fair compensation that covers your economic losses and makes up for the diminishment in your quality of life.

Settlements Are Final Most of the Time

When you enter into a settlement agreement, you will waive all claims against the other party within the agreement. This means that your release will effectively cut off all claims, known or unknown, against the at-fault driver and the driver’s insurer.

If you develop or discover other injuries, you cannot bring another claim against the driver. You remain bound by your settlement agreement even if your medical treatment or lost income eventually exceeds your estimates.

In most cases, you won’t be able to get around this by suing the at-fault driver’s spouse or business partners, either. A settlement agreement will often cover any related parties.

But settlement agreements do not always release all of your claims. Only claims arising out of your dispute with the at-fault driver get released in your car accident settlement. If you suffered other injuries due to the conduct of other parties involved in the accident, you can usually still pursue those claims.

If your vehicle had defective brakes, you can sue the auto manufacturer for product liability after you settle with the at-fault driver. If your doctor mistakenly operates on the wrong leg after your car accident, you can sue the doctor for medical malpractice even though you settled with the driver who caused the injury.

Getting the Best Possible Settlement

You need a lot of patience to get the best possible settlement. You should also speak to an experienced lawyer. You need to evaluate the merits and value of your case so you know when you have received a fair offer. You also need someone who can file a lawsuit if you cannot settle your case.To discuss the advantages and disadvantages of settling your car accident claim, contact Shaked Law Firm for a free consultation.