Car Wreck Settlement Agreements: Are You Getting What You Deserve?

After a car wreck caused by someone else's negligence, you may be able to hold them accountable by filing a claim or lawsuit against them. If both parties agree to settle the case, they will sign a settlement agreement.

A car wreck settlement agreement is an agreement by both parties to end the dispute between them, including any related litigation. When a settlement agreement is signed, the party liable for the injury agrees to meet the victim's demands in exchange for halting any further litigation.

What Does a Settlement Agreement Include?

A settlement agreement usually involves the terms of the settlement. The terms include what both parties agreed on earlier during the negotiations. For example, it will consist of the monetary compensation both parties agreed on, the terms of the settlement, when it would be paid, how long it would be paid, and so on.

Are Settlement Agreements Legally Binding?

Yes, settlement agreements are legally binding. If the other party refuses to honor the terms of the agreement, you may be able to take legal action against them. This also explains why it is important to read and understand the terms of the settlement agreement before signing.

When Are Settlement Agreements Legally Binding?

In most states, settlement agreements are legally binding when both parties sign. However, in some states or jurisdictions, these agreements are valid only after being reviewed and signed by a judge.

Should I Sign a Settlement if the Insurance Company Offers It?

When an insurance company offers a settlement agreement, the decision to sign or not to sign will depend on the specifics of your case. For instance, if you or your loved one suffered serious injuries after the accident, you should not rush into signing the settlement agreement, especially if you do not have an attorney.

This is because an experienced car wreck attorney will review the specifics of the settlement agreement to ensure it is fair. When insurance companies offer to settle such a case, especially after realizing that you do not have an attorney, chances are the terms of the settlement agreement might not be in your best interests. Remember, insurance is business, and business is all about cutting expenses and increasing profits.

The insurance company knows that when you hire an attorney, chances are they will have to pay you more than the initial offer. This is because an experienced lawyer understands the actual value of your case and might be able to fight for you to receive a reasonable settlement.

Can I Dispute a Settlement After Signing?

It is difficult to dispute a settlement after signing the agreement because it is legally binding. This also explains why it is always advisable to speak with an experienced attorney before signing the settlement agreement. The attorney will review the terms of the agreement and determine whether it is worth signing.

If the settlement agreement is unreasonable, the attorney can help negotiate better terms with the other party, ensuring you receive the settlement you need and deserve. However, when you sign the settlement agreement and want to dispute it later, you will likely have a difficult time doing that. There are only a few exceptions to this rule, though.

When Can I Legally Challenge a Settlement Agreement?

You might be able to dispute a settlement agreement if there was misrepresentation by the other party. In other words, you can challenge the agreement if the other party willingly misled you into signing by providing false information. In addition, you may be able to dispute the agreement if the other party committed fraud to prevent you from recovering the actual value of your claim.

What Determines the Settlement Amount?

In a personal injury case, especially one involving car wrecks, the settlement amount will depend on the kind of injuries and damages sustained. The impact of the injury will also influence the final settlement. Below is a hypothetical example of such a situation.

John, a professional athlete, was on his way home from training. A drunk driver ran a red light and hit John, who suffered multiple injuries, including broken limbs. The doctor's report revealed that John would never be able to walk again after the accident. As a result, his career came to an unfortunate ending.

From the above example, when such a case goes to court, the judge and jury will consider the impact of such an injury on John's life. Because the accident ended his professional career as an athlete, John can no longer care for himself and his family. In that case, when calculating the most reasonable settlement, the judge or jury will consider this factor.

They will also consider the pain and suffering John has experienced since the accident and how it could impact his life in the long run.

The bottom line is that the court will award both economic and non-economic damages, which fall under compensatory damages. In addition, the court might also award John with punitive damages, usually between 1.5 to 5 times the compensatory damages.

What Are Punitive Damages in a Personal Injury Lawsuit?

Punitive damages are damages meant to punish the defendant for their gross negligence. However, it is important to note that these damages are only awarded if the other party was grossly negligent.

What Should I Do if I Disagree With the Settlement Offer?

When the other party offers a settlement for your injuries, you can accept it, reject it, or propose a counteroffer.

For example, let's say the insurer proposed a settlement offer of $100,000, but you know that your case is worth more than that. You can simply reject the initial offer and propose a counteroffer that reflects the actual value of your case.

What Happens When You Reject the Car Wreck Settlement Offer?

If you believe your case is worth more than the initial offer by the insurance company, you can reject it. Chances are the insurance company will make you believe that there won't be any offer after that. This might be true, but insurance companies will not provide you with a complete understanding of the options available to you.

While the insurance company might refuse to table another offer, this does not mean your case is closed. Rather, it means you have the right to propose a new settlement that reflects your case's value.

The Insurance Company Is Unwilling to Settle My Claim. What Should I Do?

If the insurance company is unwilling to settle your claim, that should not be a problem. Your attorney will keep fighting for you until you reach a reasonable settlement.

If it becomes impossible to negotiate with the other party, your attorney will explore other options, such as filing a lawsuit against the insurance company. However it is unlikely that the insurer will want such a case to go to court.

Why Do Insurance Companies Prefer Settling Cases Out of Court?

Settling cases out of court has many advantages, especially for insurance companies.

First, it is cheaper than settling in court. If you take the matter to court and win, the insurance provider will be responsible for your legal expenses and attorney fees. No insurance company wants to risk losing even more money unless they are confident of winning the case. So rather than spend too much time in court, it makes more sense for insurers to settle out of court.

Secondly, reaching an out-of-court settlement is faster than fighting for the same in court. This is because court processes are subject to delays due to various factors, such as backlogs. And when it comes to personal injury cases, time could make or break a case.

How Does Time Influence a Personal Injury Case?

Time could be one of your most valuable assets when you get injured in a car wreck and are still undergoing treatment. This is because unless you have fully recovered from your injuries or reached maximum medical improvement (meaning you cannot recover beyond that point), you may never be sure exactly how much your medical bills will cost.

Say you suffered several broken bones that required surgery. After the surgery, you may be surprised to discover that you may not walk again anytime soon, meaning you will have to learn how to use a wheelchair.

But if you accept a settlement offer right after the surgery, you cannot file a new claim with the insurer just because you discovered that you needed more money to pay new medical bills. This rule applies even if your new expenses are directly related to the car wreck caused by the other party.

On the other hand, insurance companies know that the longer it takes to settle a claim, the more the bills pile. For this reason, they will want to avoid lengthy court processes and settle the case out of court as soon as possible.

How Can Morgan and Morgan Help?

Morgan and Morgan is the largest personal injury law firm in the United States, serving clients from coast to coast. We have dealt with countless insurance companies for over three decades and have helped many of our clients secure the settlement they are entitled to. For this reason, you can count on us when you need someone to fight for you or your loved one injured in a car wreck.

To get started, fill out our free case evaluation form. Then, if you have a valid claim, one of our legal representatives will contact you to discuss your case further and walk you through the next steps.