Accident Settlement Agreements: Five Things to Know
In personal injury claims, accident agreement settlements generally result in payment of compensation to the victim. The amount of compensation a victim receives for damages depends on several factors. The insurance company often prepares a car accident settlement agreement outlining the details of your settlement. An insurance adjuster from the company explains that you must sign the agreement before the company can pay your claim.
There are several reasons why a victim should consult an attorney before signing anything from the insurance company. For one, car accident settlement agreements are often lengthy and contain numerous clauses and legal terminology about liability, fault, claims, negligence, and third parties. It’s also important to remember that insurance companies don’t have a victim’s best interest in mind. The insurance company’s goal is to pay a little as they can on claims, or even to avoid paying at all. Before settling an injury claim and signing an agreement that the insurance company has prepared, there are some things that you should know about accident settlement agreements and your legal rights.
Five Things to Know Before You Sign a Car Accident Settlement Agreement
1. A Car Accident Settlement Agreement is Final
The agreement ends your claim against the insurance company and the driver who caused the accident. In other words, you are releasing other parties when the agreement is signed. An example of when this would be detrimental is when a car accident injury is made worse because of defective tires or an airbag that failed to deploy. You could pursue a product liability claim. But if they sign the settlement agreement, that would give up your right to pursue that claim.
2. Victims Don’t Know the Value of Their Car Accident Claim
It is in the insurance company’s best interest if car accident victims don’t know the true value of their claim. If they aren’t aware of how much their car accident claim is worth, they won’t know if the insurance company is undervaluing their damages. In most car accident cases, the accident victims are entitled to compensation for their economic and non-economic damages. Economic damages include financial losses caused by the car crash, such as loss of income, travel expenses, medications, medical treatment, personal care, and other out-of-pocket expenses. Non-economic damages include the pain, suffering, discomfort, and inconvenience caused by the car accident.
3. There is No Formula for Calculating Settlement Amounts
There is no exact formula for calculating the average settlement amount for a car accident. An insurance company won’t admit it, but adjusters use a basic formula to predict what a jury may award you for an injury claim if the case goes to trial. Insurance companies use statistics to calculate averages for different accident scenarios. Because no two accidents are exactly the same, an accident hardly ever fits the profile of an average claim. An adjuster will take your total financial loss incurred by an accident and multiply it by a factor of two or three. The insurance company is going to offer the lowest amount it believes you will accept to settle your claim. Another incredibly important factor is whether or not a victim has completed their treatment. An insurance company could be trying to get a victim to enter a binding agreement before they realize the extent of their injuries.
4. Accident Settlement Agreements Aren’t the Only Option
There is no requirement for a car accident victim to settle their car accident claim. The insurance company may aggressively pressure someone to enter a settlement agreement because it wants to avoid a lawsuit. This should be a red flag. If a victim is unsure whether they want to go through the expense and stress of a trial, they should discuss mediation or arbitration options with a Texas personal injury lawyer. These options settle a case outside of court. Victims shouldn’t wait to explore options. The time to file a personal injury lawsuit is limited to two years following the date of the car accident. Victims give up their legal rights to file a lawsuit if they miss the deadline outlined in the Texas statute of limitations.
5. There are Laws in Texas Governing Insurance Claims
The Texas Insurance Code governs insurance companies within Texas. They have an obligation to investigate claims fairly and in a timely manner. There are laws against the use of deceptive practices when handling car insurance claims. Examples of tactics that might be considered bad faith include:
- Ignoring a claim or lack of communication
- Failing to investigate your insurance claim
- Delaying payment of claims without a valid reason
- Intentionally misleading you about your legal rights or options
- Requiring unnecessary documentation and information
- Making threatening statements
- Refusing reasonable requests for documentation
- Intentionally undervaluing a claim to avoid liability
If the insurance company engages in unfair claim settlement practices, it could be guilty of bad faith insurance practice. When an insurance company violates laws, you are entitled to compensation for a bad faith insurance claim. Navigating an accident settlement agreement can be extremely stressful and may lead to a victim recovering less than they deserve. Our Texas personal injury lawyers want to make sure our clients come out with a successful outcome following a car accident. Fill out our contact form or call our office at 817-440-3888 for a free consultation.
