When you are injured in a car crash, the last thing you want is to become metaphorically snowed under in confusing legal jargon. A settlement agreement sounds like a bunch of paperwork, but it is one of the most important aspects of resolving your case.
The legal document indicates the amount you will be paid and under what particular circumstances. Before signing any such document, it helps to know what a car accident settlement agreement is and what to look out for.
Let’s first handle what this agreement means!
What Is a Car Accident Settlement Agreement?
Legally, a car accident settlement agreement is made between you, the injured party, and the at-fault driver’s insurance company. It sets out the amount to be paid to you in exchange for relinquishing the right to pursue any further legal action arising from that particular accident.
Once the agreement is signed, this case is terminated. You cannot go back later and ask for more money, even if new medical conditions arise. This is why it is important to know the meaning of every particular clause before signing.
What Does it Usually Cover?
Most settlement agreements provide for compensation for the following:
- Medical expenses of any type, including hospital bills, therapy, medication, and future treatment. Lost wages, including pay while recovering, and lost future wages if a person cannot work.
- Property damage, such as repairs or replacement of vehicles and property damaged in the accident.
- Pain and suffering, emotional and physical trauma sustained in the accident.
- Depending on the state, damages may be awarded for loss of dining pleasure or emotional agony for certain agreements.
How is the settlement amount determined?
Insurance adjusters will determine settlements from evidence such as police reports, hospital records, witness statements, whether or not the insured was at fault, and the degree of injured person there was.
For example, if one had an injured back and had to undergo months of physical therapy, the settlement would probably include doctor’s bills, the cost of treatment, and remuneration for days of work lost. If the injury resulted in indefinite pain, the settlement would take this into consideration.
Should the Expense Accept the First Offer?
Not usually. Insurance companies take a low stand because they have to protect their revenues. Taking the first offer, in fact, would always possibly result in a loss.
The Insurance Research Council has stated that people who have lawyers will receive settlements 3.5 times greater than those who do not hire lawyers. This shows the value of having someone who is experienced in the situation to go into their agreements.
What to Look for Before You Sign
In case you are granted the settlement, every section should be looked over carefully, especially with these matters:
- Exact dollar amount: It should cover all of your expenses, not the immediate ones.
- Release terms: You probably would give up your chance to sue later because of the same accident.
- Time of payment: Know when the money will be paid and how you will receive it.
- Tax possibilities: Some sections would be taxed, such as lost wages.
- Future medical bills: If you are still receiving treatment, it might be advisable to consult the doctor and determine the limit on their section.
Key Takeaways
- An accident settlement agreement legally settles the amount of damages given and legally fixes the right to sue the other party.
- All sections should be carefully reviewed, especially the release clause and the amount of future medical bills.
- There is no need to hurry in accepting the first offer; it is all a matter of negotiation.
- A lawyer naturally results in larger settlements and better protection of rights.
- Be sure that the settlement represents present expenses and future costs due to having received an injury.