meaning of insurance release clause?

Question

got agreement on a settlement with car accident insurance company (other guy's fault, they are paying me). They sent a Relase Form that includes this paragraph:

It is further understood and agreed that any party hereby released admits no liability to the undersigned or any others, --> shall not be stopped or otherwise barred from asserting, and expressly reserves the right to assert any claim or cause of action such party may have against the undersigned or any others. <--

what is the deal here?!?!? It sounds like they are wanting to preserve the right to sue me. I don't get why this would be part of a release form.

There is no question of whose fault it was. There is no reason why they would be suing me. Why is this here. (and don't say it's just a stock clause--that's a NON-answer)

Pls answers from people who actually know what they are talking about.

Answer 1

Even though you asked not to hear it, I have to tell you that it is a "stock clause" that is in all releases used in settling insurance claims. The wording might be slightly different in some versions but it all means the same thing.

Frankly, you have nothing to worry about. I have seen releases with this language used probably 1000's of times from both sides of a claim. I have never seen anybody get sued over it. If it really concerns you then you have two options 1) ask the insurance company to remove it (which they won't do) or 2) consult an attorney to review it for you.

The first sentence you included is very basic. ANY insurance settlement is a compromise and NEVER states that the at-fault party is admitting fault. If the roles were reversed your company would use the same language on your behalf. This is nothing to worry about once you have your check.

The second sentence is included for two reasons. 1) in some cases an accident could be considered 50% the fault of both drivers which in many states means that each driver can make a claim for 50% of their damages against the other driver. The settling insurance company can not do anything that would remove their policyholders right to a settlement in a 50/50% case. This language keeps the insurance company from taking their policyholders rights away. And 2) In the U.S. anybody can sue anybody at any time. We all have that right even if we do not have a legitimate case. The release includes this language because the insurance company can not take away their policyholders right to sue you with this release.

You might want to call your insurance company and try to talk to one of their adjusters about the release. You truly are worrying about nothing. Millions of people sign these every year with no adverse repercussions.

Answer 2

It's really hard to answer your question with out the entire release document. We really need to see the paragraphs before the clause you are concerned about to answer. There are also lots of different releases that are used and it would help to know what kind you have.

However, there are some clauses that are pretty standard in just about any release.

This could be part of a hold harmless clause. When you sign the release, the claim is over once and for all never ever to return. In the hold harmless clause, the company is saying that should you initiate legal action against them or their policy holder (after signing the release) you will be responsible for any legal fess that they incur defending your legal action.

This clause prevents you from changing your mind at a later date and trying to get more money. If you did change your mind and try to get more money - the insurance company would win because you signed the release - but they would incur attorney's fees (easily 125.00 per hour) to defend. This way - if you change your mind and cause them to incur the defense expense - they have the right to sue you to get paid back the defense costs.

The release will also say - this is not an admission of liability. That is standard language. No company is going to put in writing "it's all our fault" so you could take that into court. All releases will say its a settlement of a doubtful and disputed claim. The fact that they offered you money is them saying it's their fault. I would not worry about this language.

In the end - if you sign the release (and no, you can't alter it) and return it to them - they will send you the settlement check and that will be the end of it.

Answer 3

Yes, there is a property clause on insurance. But there is also a state required minimum. The first thing you need to do is to find out the true value of your car. Take a look at KBB.COM and see how much your car is worth. Just because they say that it will take 8K to make it right doesn't mean your car is worth 8K. I've have a 93 Taurus that my kids drive and it needs 4K worth of work but its not worth 4k even it it was fixed to look like new. Now then the second thing you need to do is to find out what the your state's minimum property damage limit is. If it is hire then the 5k they are quoting you then its time to confront the other person's insurance company with your new found knowledge. Let them know that you are very willing to take it to the next level as they failed to meet state requirements. You can also go to your insurance and see if you can file an under insured motorist claim. My under insured covers both medical and property so it might also work for you. You car was totaled which means that if you keep it you do have to file a salvage title to show that it was "rebuilt" (in other words a major accident that resulted in a nearly complete loss). This is to protect future buyers from dishonest shops and car lots. Before you car can be relicensed for the street it will have to be inspected by the DOT to insure that it is road worthy.

Answer 4

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RE:
meaning of insurance release clause?
got agreement on a settlement with car accident insurance company (other guy's fault, they are paying me). They sent a Relase Form that includes this paragraph:

It is further understood and agreed that any party hereby released admits no liability to the undersigned or any others, -->...