Five Things to Know About Car Accident Settlement Agreements

Five Things to Know About Car Accident Settlement Agreements

Most car accident claims are settled without the parties going to court. The parties might settle the claim before or after a personal injury lawsuit is filed. If the settlement agreement is signed after a lawsuit is filed, the agreement includes a stipulation that the lawsuit will be dismissed. The good thing about a settlement agreement is that it can be used to resolve a claim arising from any type of car accident.

Settlement agreements are used to settle accidents involving drunk drivers, speeding, distracted drivers, and reckless drivers.

They can also settle disputes related to wrong-way accidents, intersection crashes, parking lot accidents, and rideshare accidents.

Whether your car accident involved a large truck, motorcycle, pedestrian, or bicycle, you can settle your personal injury claim without the need to go to court. 

Five Things to Know About Car Accident Settlement Agreements

Before you agree to settle a disputed injury claim, there are a few things about car accident settlement agreements that you should know.

1.  A Car Accident Settlement Agreement is a Binding Contract

Auto accident involving two cars

When you enter into a car accident settlement agreement, the agreement settles a disputed claim. Because you are settling a disputed claim, you might not receive everything you want, but the other party is not receiving everything it wants. You may compromise to reach an agreement that avoids court.

The agreement is a contract between you and the other parties. Either party can go to court and ask the court to enforce the agreement’s terms once it is signed.

You need to make sure that you understand and agree to all the terms of the agreement. Most settlement agreements written by insurance companies favor the insurance company. Therefore, having a car accident lawyer review the settlement agreement is generally in your best interest.

Your lawyer makes sure that the settlement agreement is fair and just given the facts of your case. If the agreement is not fair, your lawyer may advise you to proceed with a personal injury lawsuit instead of agreeing to a settlement offer. Just make sure that you do not take too long to talk with a lawyer after a car accident.

Even though you might be in negotiations with the insurance company to settle the injury claim, the Florida Statutes of Limitations continue to run. If you do not enter a settlement agreement or file your personal injury lawsuit before the deadline, you lose your right to pursue a legal claim against the driver who caused your accident. 

2.  The Agreement Settles all Claims

defective auto part

A car accident settlement agreement applies to all claims arising from your car accident. Even if you are unaware that you could have a claim against another party for defective auto parts or road defects, you give up your right to pursue that claim when you sign the settlement agreement. 

Before entering a settlement agreement, your attorney investigates the cause of your car accident. He wants to ensure that all causes of action have been identified and researched. Releasing a potential claim or cause of action could result in less money for your claim.

3.  A Settlement Agreement Releases all Parties

The agreement also releases all parties that could be potentially liable for your injuries and damages, even parties you might not be aware of at the time of the agreement. This stipulation could also cause you to lose money if another party could be liable for your damages.

However, the insurance company wants to ensure that the claim ends when it pays you the settlement amount. It does not want to incur any further expense or liability related to the accident. It ensures that you will not file a lawsuit related to the car accident at a future date by including a release for all parties.

4.  You Can Negotiate a Higher Settlement Amount

car accidents

You are not obligated to accept the first settlement offer from an insurance company. In most cases, the first settlement offer is much lower than the value of your accident claim. The insurance company does not want to pay one penny more than it must pay to settle your claim. If you have not hired a personal injury lawyer, the insurance company might try to convince you that the settlement offer is in your best interest.

The insurance adjuster might tell you that going to court would result in a lower amount because of attorneys’ fees and court costs. The adjuster might try to convince you that you do not need an attorney to review the settlement agreement.

However, as we discussed above, a settlement agreement ends all claims related to the car accident. The agreement is a binding contract, so it is wise to have an attorney review the agreement.

A lawyer can calculate the actual value of your car accident claim to determine if the offer from the insurance company is fair. Your lawyer also negotiates with the insurance company for the maximum compensation available for your case. If the insurance company refuses to negotiate in good faith, your lawyer may recommend continuing with a personal injury lawsuit.

5.  Car Accident Lawsuits Can Be Settled Before Trial

Even if you have filed a car accident lawsuit, you can enter a settlement agreement before the trial. As parties prepare for a trial, the parties exchange information and evidence during the discovery phase of the lawsuit. Exchanging evidence and information allows both parties to gain insight into the strengths and weaknesses of the case.

Either party may decide that it is in their best interest to settle the dispute instead of taking the matter to trial. Juries are unpredictable. Even though you believe you have a strong case and deserve more money, a jury might not view the evidence in the same way you view the evidence.

Should You Settle Your Car Accident Claim or Go to Trial?

Your personal injury lawyer can give you advice to help you decide whether to settle a claim or go to trial based on the facts of your case and his experience handling cases similar to your case. 

There are no guarantees with a trial. Even if you obtain a favorable verdict, the other party could appeal the verdict. Appeals could take years to resolve.

Before signing a car accident settlement agreement, talk to a car accident lawyer. The insurance company has attorneys, investigators, and other trained professionals protecting its best interest. You need someone to protect you.