QuestionHello Jane,
I reached an agreed on a settlement with auto insurance company for a body injury claim after being rear ended. My car has already been repaired by the insurance company.
The insurance agent sent me a "Release of All Claims" letter to sign and send back before they send the payment check. The first sentence in the letter says "In consideration of the sum of xxx, receipt whereof is hereby acknowledged, I do hereby release ....."
I have no problem signing the letter but I am concerned about signing it and then waiting forever for the check. It has already taken 9 months to reach an agreed on figure which is nothing to speak of.
Should I sign the letter in advance or can I request that the insurance company just endorse the check as full and final settlement. Is is possible that an escrow company can handle the transaction?
Answer Hello Alex,
Releases are standard in virtually all accident claim settlements. The purpose of the release is to release the insurance company - and its insured - from all future claims. Meaning, if you sign a release for all claims you can never again seek further compensation from either the insurance company or the insured for that claim.
You must be absolutely certain that you will not need to seek further damages from the liability carrier. In other words, your injuries are completely resolved, you have been compensated for your pain and suffering, and you have been reimbursed for any out of pocket expenses.
If all of this is completed to your satisfaction, then you will need to sign the release. Under no circumstances will an insurance company issue a settlement check until you sign the release. Specifically, no, they will not mark the check as full and final payment. This would offer inadequate protection for their insured.
As for an escrow account, there is no need for that. It would never be agreed to.
Once a settlement is finalized, the insurance company is ordinarily anxious to pay the claim and get it off the books. Until the claim is paid, they are required to set aside what is called a reserve. Reserves cannot be touched by the insurance company. In essence, they are a liability. Since insurance companies make money by investing, the higher the reserves, the lower the amount they can invest. For you, this means, once the settlement is agreed to, it is to the company's advantage to just "get it over with" and pay the claim. So there should not be a delay. In claim settlements, delays are caused in the settlement negotiations, not normally in paying on an agreed settlement.
Hope this helps.
Jane Pytel
http://SolutionsForYourInsuranceClaim.com
http://FloridaAutoInsuranceCentral.com
