Five Things to Know About Car Accident Settlement Agreements

In Chicago, if you’re injured in a car accident caused by someone else’s negligence or wrongdoing, you have the right to seek compensation for your injuries through a personal injury claim or lawsuit. The majority of these cases are resolved through a settlement agreement, rather than proceeding to trial. 

It’s crucial that you understand how settlement agreements work before you agree to one. It’s also important to discuss your case with an experienced Chicago car accident lawyer before agreeing to settle your case. Your lawyer will make sure your rights and interests are protected in any settlement agreement you sign. 

To speak with a member of our team about your car accident case, contact us online or call us at (312) 929-2884.

What Five Things Should You Know About Settlement Agreements?

What Five Things Should You Know About Settlement Agreements?

A settlement agreement is an agreement that ends a dispute and voluntarily dismisses any related lawsuit. In a personal injury case, the parties usually will agree to release each other from any further liability, and the injured party will receive a payment.

If you’ve been involved in a car accident and you file a claim against the at fault party, the insurance company will try to get you to agree to settle your claim quickly. However, it’s important to review any settlement agreement carefully and seek legal advice to ensure that your rights are protected.

It’s also important to understand these five key things about settlement agreements.

Settlement Agreements Are Final

Perhaps the most important thing to understand about car accident settlement agreements is that they are final and legally binding. The agreement usually will state that it is final. Once you’ve signed the agreement and it becomes legally binding, you typically have no way to reverse it.

Sometimes, car accident victims who hastily sign a settlement agreement regret their decision and seek legal help to “get out of” the agreement. Except in rare circumstances, this isn’t possible. If there is a slight chance that you can get out of your settlement agreement, it will still be difficult to challenge your settlement agreement in court.

Once you enter a settlement agreement, there’s no going back. That’s why it’s crucial that you speak with an experienced personal injury lawyer before entering into a settlement agreement. 

A key part of settlement agreements is the release clause. This is the most important part to the defendant or paying party, who is usually the insurance company. The release clause will encompass all potential legal claims or causes of action related to the accident, even those that you did not initially bring. 

That means you will waive your right to bring any additional claims against the at fault party related to the accident in the future. 

Suppose you enter into a settlement agreement, but later realize that you should have brought additional claims and you would have been entitled to additional compensation. You would be barred from bringing these and any other claims, even though you never pursued them in the first place and were not even aware that you could.

Seeking legal advice from an experienced car accident attorney before signing a settlement agreement is the best way to protect your interests and make sure you aren’t overlooking any claims.

Settlement Agreements Will Cover Injuries You Didn’t Know You Had

Similarly, the release clause will apply to any injuries related to the accident, even latent injuries that you didn’t realize you had when you signed the settlement agreement. This means that if, at the time of signing, you believed your injuries were relatively minor but later discovered more severe damage or injuries, you still won’t be able to seek additional compensation. 

The insurance company and opposing parties want to make a single payment to you that encompasses any and all injuries and losses you sustained in the accident. Once they pay you, they want to know that you will not seek additional payments in the future. It’s very unlikely that they will leave room in a settlement agreement for claims related to any future injuries that may arise.

Settlement Agreements Can Cover People You Didn’t Know You Could Sue

Some settlement agreements will go even further and foreclose any future claims against parties other than the defendant. For example, this may include other insurance companies or related entities. 

If you fail to read the settlement agreement carefully and scrutinize each section, you may not realize you are waiving your right to sue other parties in the future. Moreover, settlement agreements are often written using legal jargon or complicated wording that can be difficult to understand if you are not used to reading these documents. This underscores the importance of having an attorney review your agreement to ensure you’re fully informed.

They’re Stacked Against Your Rights

The final key thing to understand about settlement agreements is that they are drafted by insurance companies and written in favor of their interests. Insurance companies are often large businesses and their main concern is their bottom line. 

In addition to the releases discussed above, settlement agreements may contain terms that make it challenging for you to dispute the insurer’s compliance with its obligations. For example, they may include mandatory arbitration clauses or provisions granting the insurer discretion over when and how they disburse your payments.

In contrast, when you have legal representation, your attorney can negotiate more favorable terms that protect your rights and interests. They can also explain the settlement agreement to you in detail, so you don’t risk any unpleasant surprises about it in the future. 

Schedule a Free Consultation With a Chicago Car Accident Attorney

There’s a good chance that your Chicago car accident case will be resolved through a settlement agreement, rather than proceeding to trial. Before you agree to any settlement, reach out to an experienced Chicago personal injury lawyer to review your case and ensure that your rights are protected.

To schedule a consultation with a member of our Attorneys of Chicago Personal Injury Lawyers team, contact our office today, you can call us at (312) 929-2884.