Can I File a Lawsuit After I Accept an Insurance Settlement?

By Greg Kohn

If you are injured in an accident, you might be entitled to compensation for your injuries, losses, and damages. However, before you settle your insurance claim, you may want to consult with a New York personal injury attorney. Once you settle your claim, you generally are not permitted to pursue a lawsuit.

Filing a Lawsuit After a Personal Injury Settlement

In most cases, you cannot file a lawsuit after you settle an insurance claim. The insurance company requires that you sign a liability release of all claims before you receive your settlement payment. The release is a legally binding agreement between you, the insurance company, and other parties subject to the release. 

The liability release states that you give up all future claims against the insurance company and its insured. In other words, you agree not to pursue any claims against the parties related to the covered incident or accident, even if you realize you have additional injuries, losses, or damages. In some cases, the release covers all parties that could have any potential liability for the claim. 

There are a few exceptions to the general rule that you cannot file a lawsuit after you sign a liability release when accepting an insurance settlement. If the liability release did not cover all parties that might have liability for your damages, you could pursue a lawsuit against those parties. The terms of the liability release dictate whether you can sue third parties. The release could state “known parties,” which might allow a lawsuit against a party that you discover after you sign the release.

Also, if the insurance company or any other party to the claim committed fraud, the liability release may not be enforceable. However, fraud can be difficult to prove.

What Should You Do Before Settling an Insurance Claim?

If you are injured, it can be wise to seek advice from an experienced personal injury lawyer. An attorney carefully reviews your case to determine if the amount the insurance company is offering is fair and just given the circumstances and facts of your case. The attorney also ensures that all damages are included in the settlement offer, including future damages if you sustained a permanent impairment or disability.

Before you agree to a settlement of your injury claim, make sure that you seek medical attention for your injuries. You should complete medical treatment before you settle a claim. Until you complete your medical treatment and your doctor issues a final prognosis, you cannot be sure whether you might have a permanent impairment that could result in future loss of income or ongoing medical care. 

If your claim involves severe injuries, medical care could extend for months. You may require surgery and extended physical therapy or vocational therapy. You definitely want to speak with an attorney to discuss the deadlines for filing lawsuits to ensure you do not run out of time to file a claim while you are seeking treatment for your accident injuries.

Contact Our New York Personal Injury Attorney for More Information 

If you are unsure whether to settle an insurance claim, we encourage you to speak with one of our New York personal injury attorneys. Consultations are free, so it does not cost you anything to have an attorney review your case to ensure the insurance company is not attempting to undervalue your injury claim.

About the Author
Greg Kohn is a partner at Nagel Rice and specializes in complex civil litigation cases, including professional malpractice, personal injury, class actions, wrongful death, products liability, and commercial litigation.  He has extensive experience representing clients in both state and federal court. Greg has tried many jury trials to verdict and has recovered over $50 million in settlements and verdicts in all types of personal injury matters including automobile accidents, wrongful death cases, slip and falls, and other catastrophic injury cases. Greg also handles medical malpractice cases, involving misdiagnoses, wrongful birth, and delayed cancer diagnosis. If you have questions regarding this article, you can contact Greg here.