There’s more to an insurance payout than cashing the settlement check. Follow these steps to confirm the terms of your agreement.
If you’ve successfully negotiated an injury claim without a lawyer, congratulations. But don’t get too excited yet. There are a few more steps before cashing your personal injury settlement check.
The adjuster will send you a settlement agreement, sometimes called a “release agreement,” which is a legally binding document for you to review and sign. By signing it, you agree to give up the right to any further claims against the insured in exchange for a specified sum of money.
Here’s what you need to know about accepting a settlement offer, reviewing the terms of your agreement, and what should happen before you cash the check.
Step 1: Accept the Terms of Your Settlement
Experienced negotiators know that both sides have to compromise to arrive at a fair settlement agreement. You knew going in that you’d likely settle your injury claim for less than your original compensation demand.
Ask yourself these questions before accepting the adjuster’s settlement offer:
- Does the offered amount cover all my medical costs? You will be responsible for paying medical liens against your settlement, on top of your co-pays and deductibles.
- Will I need future medical care? Some settlements include a provision for the insurance company to pay accident-related medical bills for up to a year after the original injury.
- Am I comfortable with the proposed settlement? You have the right to seek legal advice at any time during the negotiation process.
If the proposed agreement meets your needs, you’re ready to finalize your injury claim.
Send Prompt Written Confirmation
Send the adjuster a written confirmation of your verbal settlement agreement as soon as possible. The confirmation letter may be sent by email or through the U.S. Postal Service. If you decide to send the confirmation electronically, by email or fax, it’s still a good idea to send a hard copy by certified mail.
Your written confirmation should detail the terms and include the following:
- Your name
- Name of the insured
- The insurance claim number
- Date of the injury/accident
- Date of your verbal agreement
- Settlement dollar amount
- Any other terms
Make copies of the signed confirmation letter. Send one to the adjuster by certified mail and keep a copy for your injury file. When the certified mail green card comes back to you, staple it to your copy of the letter.
At about the same time, you should receive a similar confirmation letter from the insurance company.
SAMPLE: Confirmation of Settlement Letter
Date of Letter
VIA EMAIL/USPS CERTIFIED MAIL
Adjuster’s name
Insurance company name
Insurance company address
Insured’s name
Claim number
Date of injury
—
Dear (Adjuster’s name):
Pursuant to our telephone conversation on (date), please let this letter confirm we have agreed to settle my injury claim, referenced above, for the amount of (your agreed settlement amount).
Please mail the insurance company’s check and release to me at the following address:
Your street address
Your city, state, ZIP
Please don’t hesitate to contact me with any questions.
Yours truly,
Your name/signature
Step 2: Review the Settlement and Release Agreement
Whether your claim is for a car accident, slip and fall, or some other type of accident, most insurance company processes are the same. You should receive a release form from the insurance company within a few weeks.
Some insurance companies send the settlement check along with the release form, with instructions to sign and return the form before you cash your check. However, most companies won’t send your check until you sign and return the release.
Either way, read the release form very carefully. The insurance company settlement and release agreement is a legally binding contract. It’s up to you to know what you’re signing. Consider asking a personal injury attorney to review the release before you sign it or cash the settlement check.
By signing the settlement papers, you agree to give up the right to any further claims against the insured in exchange for a specified sum of money.
Understanding the Release Form
Insurance companies, along with varying states and other legislative bodies, may require unique language in their releases. The exact wording may differ, but they all contain the same basic information.
Most release agreements include:
- Your name as the one releasing (giving up) the right to further action against the at-fault party
- The name of the party you believe to be responsible for the accident/your injuries
- The date when the accident/injury occurred
- The location where the accident/injury occurred
- The amount of money to be paid to you in exchange for your release of the insured/at-fault party
Sample Settlement Agreement Language
Every contract has its share of legal jargon. Most release agreements include language stating you know what you’re signing, that the agreement is final, and that you won’t reveal the terms of your settlement. We’ve included examples of this language below.
You May Have Future Injury Complications
You acknowledge that you understand there might be additional problems from your injuries:
“This release is for … any and all known and unknown personal injuries resulting from an accident that occurred that day. In making this release and agreement, it is understood and agreed that I rely wholly upon my own judgment, belief, and knowledge of the nature, extent, and duration of said injuries.”
You Won’t Be Eligible for Future Compensation
You agree that even if you later discover you have additional injuries related to the same accident, you won’t be eligible for further compensation:
“By signing the release, you fully and completely release and indemnify (the at-fault party) and (the insurance company) from having to pay you any additional money.”
The Agreement is Not an Admission of Fault
Because the insurance company must protect their insured (your insurance company would do the same for you) most releases say the agreement is a compromised settlement and not an admission of fault:
“(The insurance company) is settling your claim but does not publicly acknowledge or admit the company nor (the insured) had any fault for the accident or your resulting injuries.”
You Waive the Right to File Another Claim
You waive all rights to file another legal claim against the at-fault party or the insurance company, based on this injury/accident:
“You acknowledge that this is the only legitimate legal claim you have against (the at-fault party) and (the insurance company).”
You Have Not Made Any Other Agreements
By signing the agreement, you confirm you’ve made no other side agreements with the at-fault party, the claims adjuster, or anyone else from the insurance company. They include this language so you can’t later say you were promised additional money for future expenses related to this claim:
“The settlement terms in the release include all the agreements, promises, and representations made to you, both written and oral, from (the at-fault party), (the insurance adjuster) and (the insurance company).”
You Must Keep the Terms Confidential
The insurance company doesn’t want you to discuss or disclose the amount of your settlement with anyone else, so most agreements have a confidentiality clause, something like this:
“The parties agree that neither they nor their representatives shall reveal to anyone, other than as may be mutually agreed to in writing, any of the terms of this Settlement Agreement or any of the amounts, or terms and conditions of any sums payable to (the releasing party).”
Preserving Property Damage Claims
If you also filed a property damage claim, and it hasn’t been finalized by the time you receive your injury settlement, carefully check the release agreement for any language stating the settlement check includes your property damage payment.
Usually, car accident property damage claims are settled quicker than personal injury claims, but not always, so review the release form carefully. Don’t sign the release for auto accident injuries until you’re sure you are not signing away your right to separate compensation for your vehicle damage.
Step 3: Resolve Settlement Questions or Problems
Never endorse or cash the settlement check if you have questions about the language in the release or the amount of the check. Get answers before moving forward.
Although you may need the money to pay your bills, once you’ve signed the release and deposited the check, you won’t be able to reopen the claim. There are no second chances after signing a release.
Contact the adjuster if you have any questions. Read the release thoroughly and write down anything unclear. The adjuster’s job is to settle claims. Answering your questions before you sign the release is part of the process.
If you’re not satisfied with the adjuster’s answers, consider talking to a personal injury attorney. Most injury attorneys offer a free consultation to injury victims.
Remember, you are responsible for making sure everything is correct. In most situations, a law firm can’t help you after you’ve signed a binding agreement. Once you sign and return the release, the insurance company will close your case. They legally owe you nothing more, not even a return phone call.
If your agreement must be notarized, don’t sign until you are in the presence of a notary public. Most banks offer free notary services for their customers.
Make copies of the signed release and the check, and keep them in your accident file.
Beware of the Statute of Limitations
Every state has its own statute of limitations for injury claims, meaning the deadline to file a lawsuit. If you haven’t settled your claim or filed a personal injury lawsuit before the statute runs out, you forfeit any right to compensation.
You must have a final, signed settlement before the deadline. A verbal agreement does not extend the statutory timeline.
Most insurance companies will finalize a settlement in a reasonable amount of time. If you’ve accepted a settlement offer, but the adjuster is holding up the final paperwork, take action to protect your claim if the deadline is looming. Contact an attorney immediately to preserve your right to compensation.
Step 4: Verify the Correct Distribution of Funds
When a personal injury lawyer negotiates an insurance settlement on your behalf, the lawyer will pay any liens and legal fees (like court reporting and filing fees) before cutting you a check for your portion of the settlement funds.
When you handle your personal injury case without legal representation, it’s up to you to make sure funds are correctly distributed.
Potential claims against your settlement include:
- Doctor or Hospital Liens: Medical providers that provided treatment after your injury accident have a right to collect payment by way of a medical lien on your settlement proceeds. You may be able to negotiate a reduction to your medical treatment costs.
- Subrogation Liens: Medicare, Medicaid, the VA, and private health insurance companies have a right of subrogation, meaning they can seek reimbursement for covering your accident-related medical expenses when you settle with the at-fault party.
- Workers’ Compensation: If your work-related injury was caused by a third party, the worker’s comp insurance company is entitled to be reimbursed out of your third party settlement for the benefits you received.
- Child Support: Many states collect unpaid child support payments from personal injury settlements.
- Attorney’s Fees: If you hired an attorney and then decided to settle the claim on your own, you may owe a portion of the attorney’s fees unless you made other arrangements.
Some state laws require the at-fault party’s insurer to put your money in an escrow account or trust account and pay liens against your settlement money before releasing the funds to you. You should still verify that any distributions were in the correct amount and went to the right place.
If the Settlement Check Is Delayed
You should receive the release agreement and check within thirty days after accepting the adjuster’s settlement offer.
If it’s been more than a month, and you’ve contacted the insurance company to follow up on your settlement check delay, you can file a complaint with your state’s insurance commissioner or insurance board.
Every state has an insurance regulatory body that can intervene when the relationship between a claimant and an insurance company breaks down.
Before contacting the state board, have all documentation related to your claim gathered and in order. The board will assign an investigator to your case. That investigator may ask to review your documents, especially those related to the final settlement agreement.
After the review, the investigator will contact the insurance company to find out why you haven’t been paid. Although these breakdowns don’t occur often, you can be confident your check will arrive soon after the insurance company hears from the investigator, rather than risk further legal action.
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