Things to Know Before Signing a Car Accident Settlement Agreement

Dec 31, 2019 | Car Accidents, Insurance Information

Most auto accident claims are resolved out of court with the insurance company representing the at-fault party. However, before signing any settlement documents, you should be aware of your legal rights and the consequences of accepting an insurance settlement. What happens if you want to pursue further damages after accepting a settlement? Is it advantageous to settle your case out of court instead of going to trial? Let’s examine car accident settlements and factors to consider before accepting them.


An auto accident settlement agreement form is a document describing how the affected parties will resolve their differences, dismiss claims, and release the other party from any liability. A settlement agreement is also called a release or a waiver. Upon acceptance by both parties, a settlement agreement is final.

Most settlements involve compensation to an injured party by an insurance company in exchange for releasing the insurance company and the driver at fault from further liability. A valid settlement agreement includes the following information:

  • Accident details: the date, time, and location of the car accident
  • Claims for damages: the document should list all claims – physical injuries, property damage, and other non-material damage
  • Releases: the agreement should specify whether it releases the at-fault party of all claims or only specific claims. Insurance companies might create separate agreement documents for bodily injury and property damages
  • Parties involved: the agreement should identify the parties involved in the claim
  • Settlement amount: the agreement should state how much the insurance company is paying to settle the claim


Car accident injuries aren’t always immediately apparent, and treatment and physical therapy costs can add up during your recovery. If you received injuries from an auto accident, delay signing a settlement agreement until your condition has stabilized and your treatment is complete or nearly complete. Once signed, a settlement agreement is final. You have released the insurance company and the other party from future liability claims. You can no longer pursue further damages–even if discovering additional injuries or complications after your settlement is paid.

In cases where your treatment is progressing well, and you know the full extent of your injuries, then it’s probably okay to proceed with an insurance settlement. You may need to consult with a personal injury attorney to determine how long you have to file a claim after your accident. It is, however, better to delay signing a settlement agreement until you have a full account of your injuries whenever possible.


After an insurance company presents its highest settlement offer, it is your choice to either accept or reject it. You may be thinking that a court will rule in your favor and rule for maximum compensation in your claim, but this often isn’t true. It’s advantageous to settle a claim for several reasons. One is reduced expenses by avoiding legal fees.

Taking a claim to trial exposes any weaknesses in your case that the opposing attorney could exploit – weaknesses which a claims adjuster would have little or no knowledge. Not taking a claim to trial allows you to avoid the stress of litigation and the longer time frame to resolution compared with a settlement.

However, some situations require taking your case to trial. Unreasonable insurance companies or those with reputations for being unreasonable may warrant bypassing the settlement process and proceeding directly to a court case. If your case involves serious injuries or fatalities, the complexity of your case might also warrant going to trial.

Don’t sign a settlement agreement if you disagree with any of the terms. You can take advantage of other resolution options, such as mediation. If, in the end, you and the other party are unable to agree on terms, then you might have no alternative except filing a lawsuit.


The Folger Law Firm can evaluate your case and quickly determine your options for either settling your claim or taking it to trial. Contact us today at (602) 774-0033 to discuss your situation.