What to check before you sign a property damage release
Pointers from a motor vehicle claims attorney
The insurer may offer money for your repairs or totaled car. In return, it may ask you to sign a release. Look over the release before you think about the check. It can spell out which claims, and which people, you’re giving up the right to pursue. Its language may reach past the payment for your car. [1, 2]
Mark what the release covers
Find the crash date, the people and companies being released, the payment amount and the kinds of loss named. Is it limited to property damage you know about? Or does it also reach injury, rental, diminished value, hidden repair damage and future losses? Get a written explanation from the insurer for any broad phrase. New York has directly addressed property damage releases that reach further than the settlement. Other states may follow different rules. [1]
Look for issues that aren't settled yet
The first repair estimate might not include hidden damage. You may still be getting a medical problem checked. Find out if the release would close either one. Your own insurer may have paid collision benefits. If so, let it know about the proposed settlement before you sign. That gives it a chance to address its recovery rights. [1, 2]
Protect your options
Ask for the full form and a breakdown of the settlement. Do not sign a form that is blank or incomplete. Hold on to a copy of the signed version and proof of payment. If the wording is confusing or an injury claim is involved, talk with a lawyer licensed where the crash happened. A valid final release can be hard to undo. [1, 2]
Questions to ask before you sign
- Which losses, exactly, does this payment settle?
- Are my hidden damage and injury claims kept open?
- Has my own insurer looked at its recovery interest?
Circle the broad language
Circle every phrase that mentions all claims or future losses. Ask for the meaning of each one in writing. [1]
Sources and further reading
- 1New York Department of Financial Services, property damage release opinion
- 2Washington insurance commissioner, notice before settlement
This general overview reflects a motor vehicle claims law view. Release wording and whether a release holds up vary by state. Have a local attorney look over the release when an injury, hidden damage or a big loss hasn’t been resolved.
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