There are generally four different standard types of settlement releases are used by insurance companies when personal injury or bodily injury cases settle. The settlement release is a contract: no matter which release is used in your claim; it is an agreement that in return for settlement money from the insurance company you will discontinue pursuit of the claim against the insurance company and their policy holder. Standard releases do not generally admit fault. You will be expected to sign a release in exchange for anything more than a nominal amount of money. The release will be the same whether you are working through your attorney or are able to settle your personal injury claim on your own.
Like any contract, you want to read the settlement release before you sign it. The insurance adjuster and/or attorney will explain it to you, but you still need to read it. The release must say exactly what is being paid (the amount) and what it is for; the specific date of your accident and that the settlement is for an injury. Make sure that the wording on your release and on your settlement check only pertains to the issue that you are agreeing to settle. The different aspects of your claim are separate.
Here is an explanation of the four standard settlement releases:
This release is used in settlements for injured adults, single or married. It is an agreement that the insurance company will pay the stated amount of money in return for your agreement to discontinue your personal injury claim.
Husband and Wife Release
This release is used in settlements for injured married adults when an allegation of loss of consortium has been made. It is an agreement that the insurance company will pay the stated amount of money in return for your and your spouse’s agreement to discontinue your personal injury claim, and any spousal claim for solace, companionship and the like arising from your personal injury.
This release is used in settlements for injured persons under the age of 18. It is an agreement that the insurance company will pay the stated amount of money to the parents and/or guardians of the minor child in return for their agreement to discontinue their claim. However, since the minor will not be of an age to make the decision to settle the claim him/herself until the age of 18, this release wording means that if the minor wishes to re-open the claim at the age of maturity the parents need to pay the settlement money back to the insurance company so that the case may move forward. This very rarely happens because it is why so many insurance companies have settlements for more than a nominal amount to minors Court-approved (see our “settlements” page).
Open-Ended Medical Release (for adult or minor)
This release is used in settlements for injured persons where future medical treatment is anticipated but settlement is desired by both sides. The injured person wants and/ore needs settlement money now, but also wants an assurance that they will not be surprised by future medical expenses. These releases are not used as commonly as the other three. It is not as popular because it does not give true final resolution to the claim.
The best way to explain this release is to give an example: an open-ended medical release would be used would be one where the injured person has recovered from his or her injuries and whose doctor just wants another check-up or two in six months to a year. In this case, the injured person wants to go ahead and settle but wants the insurance company to agree to pay the additional medical expenses. The release wording would name the amount of settlement money being paid, and also name an amount of money that the insurance company would pay up to for actual incurred, accident-related medical bills for a named amount of time.
Some cases may be settled using customized releases. Settlement releases for cases that are litigated (go to trial) may occasionally be specialized. Cases involving wrongful death will use customized releases. Remember to always read a release before signing it and ask questions if you have them.
This article is written for informational purposes and is not intended to take the place of competent local legal counsel.
Other articles related to this topic:
The Insurance Claims Process Explained
Is An Attorney Necessary?
Personal Injury Claim Values
Personal Injury Claim Settlements
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