The release is one of the most important documents in any personal injury claim. In most instances, you need to sign the release before you can get your settlement money, but there are a few key things to consider before you arrive at that point.
To Get a Settlement, You Have to Sign
It's important to reiterate: You have to sign the release in order to get your personal injury settlement money from the at-fault party's insurance company. But that doesn't necessarily mean that you should sign.
You Can Still Negotiate Before You Sign
The next question is, do you have to sign the precise release form that the insurer wants you to sign, or do you have some leverage to negotiate the terms of the release? This usually depends on whether you have a personal injury lawyer or not. If you don’t have a lawyer, your chances of convincing the insurance adjuster to make some changes to the insurer’s standard release form are pretty much zero. It’s likely going to be non-negotiable. The adjuster will almost definitely tell you that, if you want to settle the case, sign their form. So, if you're representing yourself in a personal injury claim, and you don’t want to sign the insurance company's release form, you probably won’t get any money.
So, if you’ve settled your own case, but don’t like the insurer’s release form, you’ll probably have to hire a lawyer and pay him or her to negotiate the terms of the release. That may or may not be worth it, depending on the terms of the release and how far from acceptable it is to you. But typically, when lawyers are involved, everything becomes negotiable. (Learn more about how having a personal injury lawyer can make a difference.)
What Does the Release Say?
A release usually says—in fancy legal language, or course—that you and everyone related to you give up your joint and individual rights to sue the defendant and (very often) anyone else responsible for the underlying accident and your resulting losses (damages). A release can say a lot of other things, but that is the key provision. It says essentially, "This matter is over, and neither you, nor anyone else, can ever make any legal claim for this injury against anyone else ever again.”
Could that standard language be objectionable? Sometimes it could. What if you claim that two people or companies were responsible for your injury? In that case, you wouldn’t want to sign a release that extinguishes your right to file a personal injury lawsuit against someone else for the incident that caused you harm.
What is the insurer really getting at here with this provision? In reality, the insurer doesn’t care who else you sue for your injury. It just doesn’t want to have to pay out any more money for your injury claim. And if you sue someone else for your injury, that other defendant might bring the first defendant (who just settled its case with you) back into the lawsuit as what’s called a “third party defendant.” If the insurance company that just settled its case with you gets sued again, it might have to pay out more money on the case, and it doesn’t want that. That is why releases typically say that you can’t sue anyone else for your injury.
There are numerous other provisions that insurers and defense attorneys like to slip into releases. A good plaintiff’s lawyer has to take care to read a proposed release very carefully, and has to be prepared to argue with the defense attorney about any objectionable terms.
One provision that defense attorneys and insurers sometimes try to put into releases relates to what is called a Medicare Set-Aside (MSA). An MSA is a special bank account that the plaintiff uses to fund his or her reasonably expected post-settlement medical bills related to the injury, if the plaintiff is on Medicare or reasonably expects to be on Medicare in the near future. Medicare may not pay for future medical expenses related to the injury until the MSA is exhausted.
If you commit to an MSA, you could be committing to putting tens of thousands of dollars into this special bank account. However, there is no law requiring plaintiffs who settle personal injury cases to establish an MSA. There is no reason to set up an MSA if you settle a personal injury case. Your lawyer should be prepared to argue strongly with the defense attorney and insurer if they demand an MSA.