If you’ve been in a car accident, you may receive a settlement offer from your insurance company soon after filing your claim. While it might seem like a quick and easy way to get compensated, you should think carefully before signing anything. In fact, the question “Should I sign a settlement release from my car insurance company?” is one of the most important decisions accident victims face. Signing too soon could mean giving up your right to full compensation for your injuries, lost wages, and other damages.
The recent Illinois case, Al-Any v. Harshaw, illustrates just how dangerous it can be to sign a settlement before getting independent legal representation to fully understand its consequences. In that case, a car accident victim accepted a quick settlement, only to discover later that her injuries were far more severe than she initially realized. The insurance company, State Farm, had offered her $800 along with up to $15,000 in medical expense coverage. However, after signing the release, she incurred over $16,000 in medical costs. When she tried to challenge the settlement, the court upheld the agreement, ruling that a lack of full knowledge about injuries does not automatically void a release. This case serves as a cautionary tale for accident victims considering whether to sign an insurance settlement.
Key Takeaways
- Insurance companies aim to settle quickly and for the lowest amount possible—you may be entitled to much more than their initial offer.
- Signing a settlement agreement usually waives your right to additional compensation, even if new injuries or damages arise later.
- Consulting a personal injury lawyer is essential before signing any settlement—an attorney can help negotiate a fair deal.
- You are not obligated to accept a settlement immediately—always take the time to assess your injuries, expenses, and legal options.
How Insurance Companies Use Quick Settlements to Their Advantage
Insurance companies are in the business of making money, and one way they protect their profits is by settling claims as quickly and for as little as possible. After an accident, they may pressure you to accept a settlement before you’ve had time to fully assess your injuries and losses or even talk to a lawyer.
The reasoning behind this strategy is simple: many injuries, such as whiplash or spinal damage, may not show their full effects until weeks or even months later. If you sign a release of liability, you may be unable to seek further compensation, even if new medical issues arise. This is exactly what happened in Al-Any v. Harshaw—the plaintiff signed settlement documents she didn’t understand before undergoing a full medical evaluation and was later unable to recover additional compensation.
What Happens If I Sign a Settlement With My Insurance Company?
When you sign a settlement agreement with your insurance company, you are agreeing to accept a specific amount of money in exchange for releasing the insurer from further liability. This means that, in most cases, you cannot request additional compensation later, even if your injuries worsen.
In Al-Any v. Harshaw, the plaintiff claimed she did not understand that signing the insurance company’s settlement document would prevent her from seeking additional compensation. However, the court ruled that the settlement agreement was valid and binding, emphasizing the importance of reading and understanding any document before signing.
Why You Need a Personal Injury Lawyer Before Signing
If you’re asking, “Should I sign a settlement from my insurance company?” the most critical step you can take is consulting a personal injury lawyer before making any decisions. An attorney can:
- Assess the True Value of Your Case – Insurance companies often make low initial offers. A lawyer will evaluate your medical expenses, lost wages, and pain and suffering to determine whether the offer is fair.
- Protect Your Legal Rights – Signing a settlement may prevent you from seeking additional compensation. An attorney ensures you don’t unknowingly waive critical rights.
- Negotiate for a Better Settlement – Lawyers know the tactics insurers use to minimize payouts and can push back to secure a fair settlement.
- File a Lawsuit If Necessary – If negotiations fail, an attorney can take your case to court to pursue full compensation.
Hiring a lawyer is particularly important because insurance companies do not have your best interests in mind. Their goal is to pay as little as possible, and without legal representation, you may settle for far less than you deserve.
Key Factors to Consider Before Signing a Settlement
1. Have You Been Fully Evaluated by a Doctor?
Many injuries take time to develop. What feels like minor neck pain today could turn into a serious spinal issue requiring surgery. Always wait until you have undergone a full medical evaluation before considering any settlement offer.
2. Does the Settlement Cover All Your Damages?
Insurance companies often offer settlements that cover only immediate medical bills and property damage, but what about:
- Future medical expenses?
- Lost wages?
- Pain and suffering?
- Emotional distress?
If the settlement does not account for these, you may be leaving a lot of money on the table.
3. How Long Do I Have to Accept an Insurance Settlement?
You are not obligated to accept a settlement immediately. In fact, most insurance companies provide a deadline, which is typically weeks or even months after the accident. However, it’s crucial to understand the statute of limitations for filing a lawsuit in your state. In Illinois, you generally have two years from the date of the accident to file a personal injury lawsuit. Work with a lawyer and take your time to determine what the real severity of your injury is.
4. Can I Sue After Signing an Insurance Settlement?
In most cases, once you sign a settlement agreement, you cannot recover additional compensation. The settlement agreement will likely include a release of claims, which means you waive your right to pursue further legal action. This is why it’s critical to have a lawyer review the settlement before signing.
5. Can I Negotiate an Insurance Settlement After Signing?
No. Once you sign, the agreement is final. However, if you have not yet signed, you absolutely can (and should) negotiate for a better settlement. Insurance companies often start with a lowball offer, expecting claimants to negotiate. A personal injury attorney can help assess the fair value of your claim and negotiate on your behalf.
How to Protect Yourself Before Signing a Settlement
If you’re considering whether to sign an insurance settlement, follow these steps to protect your rights:
- Consult an Attorney – A personal injury lawyer can review the settlement offer and determine whether it fairly compensates you. We handle injury cases on a percentage of recovery fee and, in the rare chance that the current offer is great, we can offer document review and explanation for a modest charge (just so you know what you are signing).
- Get a Full Medical Evaluation – Do not settle until you understand the full extent of your injuries.
- Calculate All Your Damages – Factor in future medical bills, lost wages, and non-economic damages like pain and suffering.
- Don’t Rush – Insurance companies (and scam artists) use urgency and time pressure to get people to make bad decisions. You have time, don’t make rash decisions.
- Negotiate – The first offer is seldom the best offer. Skilled injury attorneys can dramatically increase settlements.
Final Thoughts: Should I Sign a Settlement From My Insurance Company?
The short answer? Not without careful consideration and legal advice. As Al-Any v. Harshaw demonstrates, signing a quick settlement can prevent you from obtaining full compensation for your injuries. If you have any doubts about whether the settlement is fair, speak to an experienced personal injury attorney before signing anything.
Your health and financial future are too important to rush into a settlement that may not fully cover your losses. Take the time to evaluate your options, negotiate when necessary, and only sign when you are confident that the settlement is in your best interest.