The area of personal injury law is complicated. There are many statutes and appellate laws that govern personal injury claims and a layperson is taking a big risk by handling their own claim. There are many things that can happen through the course of a claim that could prevent you from recovering damages, or that expose you to personal liability. There is no way to point all of these out, but here are two that are extremely important to be aware of:
1. If you have been in an automobile accident and you have Underinsured Motorist coverage through your own insurance company, then before you settle with the at fault drivers insurance you must first obtain written consent to do so from your own automobile insurance carrier. This protects your insurer’s possible subrogation rights. If you do not obtain this consent your own automobile insurance carrier could deny your claim to them for underinsured motorist benefits.
2. If any of your medical bills have been paid by private health insurance, Medicare or Medicaid, then those entities have a right to be paid back for the bills they have paid. This is called subrogation. This is a complicated area, and it is not recommended that you attempt to resolve these obligations without the guidance of an attorney.
If you and the claims adjuster agree on a settlement amount for your personal injury claim, you are just a few steps away from finalizing your claim and receiving compensation for your injuries.
Before the insurance company can send you a check in the amount of the final settlement offer, you should:
- Send a letter to the insurance company confirming the settlement amount;
- Make sure you fully understand the terms of the release form sent to you by the insurance company (it is always advisable that a lawyer review the release before you sign it); and
- Sign the release form and return it to the insurance company.
This page provides basic information about how to accept a settlement offer from an insurance company. It may not apply to you, and is not a substitute for consulting with an experienced personal injury lawyer. Only a licensed attorney in your area can give you legal advice about your situation.
Sending a Confirmation of Settlement Letter
Typically, the claims adjuster will make a verbal offer to settle your personal injury claim over the phone. If you and the claims adjuster have verbally agreed to a settlement amount, you need to send a letter to the insurance company confirming the amount you agreed upon. This type of letter is known as a “confirmation of settlement letter.”
If you decide to send a confirmation letter you should do so promptly. Make a copy of the confirmation of settlement letter for your records.
The insurance company may send you a similar confirmation of settlement letter. Be sure that the insurance company’s letter accurately reflect the final settlement amount you and the claims adjuster agreed to over the phone. If you have questions about discrepancies between your confirmation of settlement letter and that of the insurance company, call the claims adjuster right away.
Below is a sample confirmation of settlement letter to an insurance company. Be sure to include your personal information where applicable.
Sample Confirmation of Settlement Letter
Date of letter
Name of claims adjuster
Insurance company name
Insurance company address
Re: Your name and date of birth
Name of insured party
Date of accident or injury
Dear [CLAIMS ADJUSTER],
Pursuant to our phone conversation on [DATE], please accept this letter as confirmation that we have agreed to settle my claim referenced above, in full, for the amount of [AMOUNT OF FINAL SETTLEMENT OFFER].
Please mail the insurance company’s check in the amount of [AMOUNT OF FINAL SETTLEMENT OFFER] and release to me at the following address:
Your street address
Your city, state, ZIP
If you have any questions, please do not hesitate to contact me.
Your name, printed
Understanding the Release Form
Within a week or two, you should receive a release form from the insurance company. Some insurance companies send your settlement check with the release form, and require you to sign and return the form before you cash your check. Most insurance companies do not send your settlement check until you sign the release form and return it to the insurance company.
Either way, you must read the release form very carefully before signing and returning it to the insurance company. It is important to understand what you are signing, as signing the release form and depositing your settlement check can have serious legal and financial consequences. It is always recommended that you have a personal injury lawyer review the release form. You should make copies of the signed release form for your records, as well as the settlement check when it arrives.
The exact wording of your release form you receive may vary, but typically the release form will require that you acknowledge that no further payments will ever be made, even if your physical condition worsens or you require future medical treatment. The release forms will also require that you acknowledge that there are no medical or other liens, and if there are, that you will indemnify and/or hold the insurance company harmless from any such liens. The release form will also typically provide that neither the insurance company nor its insured admit fault.
The release form will also typically provide that by signing the release form, you will waive all rights to file another legal claim (including a personal injury lawsuit) against the at-fault party (or the insurance company based) on this accident. You are agreeing that the money you receive from the insurance settlement satisfies this claim and any other legal claims you might want to bring at a later time.
Signing the release form may not prevent you from pursuing a legal claim against other available sources, such as another at-fault driver or a government entity that was partially responsible for your injuries, or your own insurance company for underinsured motorist benefits.
Because signing a release form and accepting a settlement offer can have serious legal consequences (including waiving your right to sue the at-fault party), you should want to consult with an experienced personal injury lawyer before doing so. Many injured people are quick to accept a settlement offer without realizing that they are relinquishing certain rights. A personal injury lawyer can help you understand any other options (such as filing a personal injury lawsuit) you may have.
Sign and Return the Release Form
If you are absolutely certain that you understand the terms of the release form and all of the potential consequences, then you may sign the release form and return it to the insurance company. Be sure to make a copy of the release form for your records. If the insurance company sent your settlement check with the release form, you can now endorse and deposit the check. If the insurance company did not send your settlement check with the release form, it should arrive within 14 days of the date you returned the settlement release to the claims adjuster.
Disclaimer: Information provided on this site is NOT formal legal advice. It is generic legal information. Under no circumstances should the information on this site be relied upon when deciding the proper course of a legal action. Always get a formal case evaluation from a licensed attorney if you think you might have a personal injury lawsuit.