Sign A Release of All Claims and Rights?

by Peter
(WA (Residence), ID (Accident Location))

I have agreed with the insurance company (farmers insurance) on a settlement for a. medical expenses, b. lost wages, and c. general damages for a household burn injury in Idaho state.

The insurance company has given me a statement with the amounts for each of the three categories, and they have asked me to sign a form called a, "Release in Full of All Claims and Rights," prior to their dispersing or the payment.

my question: is this a normal procedure? Am I signing away anything that can come back to bite me? the paragraph that raised a flag for me was the one that states: "FURTHER, I agree to REIMBURSE and INDEMNIFY all released parties of any amounts which any insurance carriers, government entities, hospitals or other persons or organizations may recover from them in REIMBURSEMENT for amounts paid to me or on my behalf as a result of this accident by way of CONTRIBUTION, SUBROGATION, INDEMNITY or OTHERWISE.

Everything else of the short form seems agreeable to me. it says that once the agreed upon amount is paid, that i forever discharge the insured and their agents/reps from any damages. it also states that there is no admission of liability.

legitimate?

thank you so much for any help you can lend...and i WILL be making a contribution to keep this site going!!
Peter


Answer

Hello Peter,

You have couple of question here. 1. is this “normal procedure?” Yes, most insurance companies will not pay you any third party damages until you sign the release of any and all claims.

As you see, the release is very broad and it will be discharged the insurance company from any liability for anything related to your claim. What this means is that for the settlement amount, you will have to pay medical providers, property damage, future pain and suffering, and future damages.

If a medical provider is not paid, you will have to pay them out of your settlement. Basically, it is a here is this money – pay for all your damages (whatever they are). Often, medical providers put a lien against your settlement (if a balance is owed) and the insurance company is required to pay those liens first and then send you the remainder (after you sign the release). They should have explained this to you. Talk to them and see how much will be TO YOUR POCKET. They will have to explain to you if there is any lien.

Be careful however, even if the insurance company represents to you that there is nothing owed to anyone and the only thing you have to do is sign. Even if the insurance company makes a mistake, you might still owe a provider out there. Just make sure all providers are paid.

In short, yes, this is standard and just about every insurance company uses this language. Simply make sure you get what you settled for and that no part of the settlement will paid to someone else.

As always, check with a local attorney and ask them to look at the language on the form. It is possible that the insurance company has put other provisions that we do not know about.

Good Luck
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