What Is A Personal Injury Settlement Agreement?
Posted in Personal Injury on January 19, 2021
If you or somebody you care about sustains an injury caused by the careless, negligent, or wrongful actions of somebody else, you should be able to recover compensation for your losses.
However, securing compensation can be difficult, regardless of whether the matter is resolved through an insurance settlement agreement or a personal injury lawsuit. Here, we want to help you understand what a personal injury settlement agreement is because we know that this is how the vast majority of injury claims are resolved.
Defining personal injury settlement agreements
The personal injury settlement agreement is actually a legally binding contract between you and the party that you have filed your claim against. In a personal injury case, this settlement may also be referred to as a “mutual” or “general” release, which is typically an agreement for one party to pay a certain amount of compensation to the other party for their injury expenses, including medical bills, lost wages, property damage losses, pain and suffering, and other damages.
For example, if you sustained an injury in a car accident that was caused by another driver’s careless or negligent actions, then the at-fault driver’s insurance carrier may try to negotiate a settlement with you to pay your damages.
However, it is crucial to point out that the insurance carrier for the other party involved is not on your side. They are going to do anything they can to limit the amount of money they pay you in a settlement. Far too often, this means that an insurance carrier tries to save themselves money by not offering the full amount of compensation that the victim should actually receive.
In these cases, it is important to point out that an injury victim is well within their rights to negotiate with an insurance carrier. However, this is easier said than done. Often, injury victims choose to work with a personal injury attorney to help ensure that they receive maximum compensation for their claim.
What is a release, and how is this related to a personal injury settlement?
Most personal injury settlements are going to include a release of liability. This is a document that the person receiving the settlement will be asked to sign in order for them to receive compensation. The release will prohibit the injury victims from bringing additional claims against the at-fault party for compensation related to the same accident.
The release document in a personal injury case regularly includes the settlement amount, the names of the parties being released, as well as the claims that are being released (i.e. all claims to personal injury or property damage for that particular incident).
What happens after a settlement?
After a personal injury settlement is finalized and the released documents have been signed, a check for the agreed-upon funds will generally be deposited into the account of the attorney used by the personal injury victim (or directly to the injury victim if they did not use an attorney). If an attorney was used, then they will collect any legal fees they are owed, pay any debts you had related to your injuries, and release the rest of the agreement to you.
It is crucial to understand that personal injury settlements are final after all of the documents have been signed. There is no way to go back and secure more compensation should you later discover that your injuries or other expenses were worse than expected. Injury victims should never accept a settlement until they have reached maximum medical improvement so that they know exactly how much their expenses will be.