Right of Settlement is the clause that allows your insurance company to settle a claim against you.

Even if you believe it is not your fault!

Your insurance company reserves the right of settlement any claim or lawsuit against you as they see fit. Therefore, if you are in an accident you do not believe you are at fault for but your insurance carrier does, then they will pay the other party.

This of course is not in the best interest of the insurance company, and they have an affirmative duty to believe you. This is controversial because many times insureds believe they are not at fault but the damages do not support their version of events. (He hit me on my right, but there is only damage to left side).

Often times, insureds do not know the rules of the road and they will argue their non-responsibility based on those rules. Always know the rules of the road in your state before you give a recorded statement.

It takes a good investigation before the insurance carriers will go against the wishes of their insured (bad faith). They usually only make this decision if they have independent witnesses or a police report that is clear about their insured responsibility in the accident.

Right of Settlement allows your insurance company to act against you. If you disagree you can force the insurance company to go to arbitration. Read more on Mandatory Arbitration Clauses.

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