Five Things To Know About Car Accident Settlement Agreements in Los Angeles

In Los Angeles, car accident settlements are governed by California state law. Certain terms are typical because the opposing party (usually an insurance company) will demand them. Although no two settlement agreements are exactly alike, it is beneficial to understand the contents of a typical settlement agreement. 

Always hire a car crash attorney to review a settlement agreement before you sign it. And in the meantime, read on to learn about five important aspects of car accident settlement agreements in LA.

Table of Contents

#1: Your Settlement Agreement Will Probably Release All Parties From Future Liability

Any insurance company will insist upon a release clause that permanently relieves them of the obligation to pay any more money for the car accident that generated your claim. That means you can never return to ask for more money concerning the same accident. The only party who might not demand a release is an individual defendant with no lawyer and no insurance coverage.

Settlement Agreement Release Clauses Are Extremely Broad

Any insurance company, and many defendants, will insist that the settlement agreement permanently eliminates liability:

  • For injuries you didn’t know you had at the time you signed the agreement;
  • For claims you didn’t know you had (a claim against a nightclub that sold alcohol to a driver who injured you in a DUI accident, for example); and
  • Against parties you didn’t even know you could sue.

Although these terms are standard (and probably unavoidable), your lawyer can help you understand exactly what rights you are giving up.

If you finalize a settlement agreement and both parties sign it, the settlement agreement becomes a binding legal contract. If the opposing party refuses to pay or unreasonably delays payment, you can sue on the settlement agreement. Such a lawsuit is not a personal injury claim but a contract claim. The legal rules governing contract claims differ from the rules governing personal injury claims. 

If you win your contract claim and the opposing party still refuses to pay, you can motion the court to seize the opposing party’s assets to settle your claim. The court will probably seize money from the opposing party’s bank account.

#3: You Don’t Have To Sign a “Take It or Leave It” Settlement Agreement Provided By the Other Party

If you try to settle your claim on your own, you can rest assured that the opposing party will present you with a settlement agreement that they wrote. This agreement will heavily favor the opposing party’s interests, even if this favoritism is not evident from reading the agreement’s text. A skilled lawyer will immediately notice any unfavorable terms and demand their removal. 

#4: The Opposing Party Will Use Every Trick in the Book To Save Themselves Money

Following are some tricks that an opposing party, particularly an insurance company, might try to pull on you.

Insisting on an Arbitration Clause

The arbitrator is likely to be someone selected by the opposing party: An arbitrator is a “rent-a-judge” who imposes a settlement on the parties after hearing each party’s arguments. Arbitration awards might not be fair, and they are difficult to appeal to a court.

Exploiting California’s “Pure Comparative Negligence” System to Your Disadvantage

If more than one party was at fault, California courts assign a percentage of fault to each party and subtract a corresponding percentage from each party’s damages. In settlement negotiations, the parties try to predict what a court will do if the claim goes to trial. The opposing party will try to exploit the inherent subjectivity of California’s comparative negligence system.

Drafting the Settlement Agreement in Incomprehensible “Legalese” 

Legalese is a strange “language” indeed. The idea here is to prevent you from understanding the terms of the agreement. This tactic will not work if you have retained a skilled personal injury lawyer. 

Pressuring You To Sign a Settlement Agreement Before Your Lawyer Reviews It 

Your lawyer should either draft the agreement or review it and demand changes if necessary. If you don’t have a personal injury lawyer yet, get one.

Shortchanging You on Non-Economic Damages. 

Pain and suffering damages, which constitute only one portion of non-economic damages, often amount to more than 50% of a personal injury claim. You might settle for far less than you deserve if you don’t realize this.

Pain and suffering are not the only possible form of non-economic damages. Other elements of non-economic damages could include:

Wrongful death claims can carry their own non-economic damages as well.

Misrepresenting the Statute of Limitations Deadline

The opposing party might deliberately delay payment and then try to convince you that you cannot enforce the settlement agreement because the statute of limitations deadline passed during the delay. This reasoning is wrong. A lawsuit over a settlement agreement is a contract claim, not a personal injury claim. The personal injury statute of limitations does not apply to settlement agreements. 

If an insurance company tries to pull this trick on you, you might have an “insurance bad faith” claim against them. This means you will have two claims-–personal injury and insurance bad faith.

#5: Insurance Policy Limitations Might Make It Impossible To Collect the Full Value of Your Claim

No matter how much your claim is worth, no insurance company has to pay you more than the limits stated in its insurance policy with the insured. This limitation applies even if you file a third-party claim against the defendant’s insurance company. In California, drivers only need to purchase auto insurance with the following maximum payouts:

  • Bodily injury liability: $15,000 per person. 
  • Bodily injury liability: $30,000 per accident (shared among two or more victims, even if no individual victim receives as much as $15,000).
  • Property damage liability: $5,000.
  • Uninsured motorist bodily injury coverage: $15,000 per person / $30,000 per accident. You use this insurance to pay your own damages if the at-fault driver has no insurance.
  • Uninsured motorist property damage coverage: $3,500 minimum. This insurance also pays your own damages.

Commercial truckers and Uber/Lyft drivers carry far more than the minimum amounts of bodily injury liability insurance listed above. Additionally, an individual motorist might carry more than the minimum amount of insurance.

Contact a Personal Injury Lawyer Before You Begin Negotiating a Settlement

Hire a reputable personal injury lawyer before you assert your claim so the opposing party will not dare try any tricks on you. Once you hire a lawyer, you can demand that the opposing party direct all further communication to your lawyer.

If you were injured in an accident in Los Angeles, CA or you lost a loved one and you need legal assistance, please contact us to schedule a free consultation at (877) 300-4535. One of our Los Angeles Personal Injury lawyers at M&Y Personal Injury Lawyers will get in touch with you soon.