Why You Need a Lawyer to Review Any Settlement Agreement

After the long, difficult journey of a car accident claim, receiving a final settlement offer from the insurance company can feel like the finish line. The adjuster sends you a check and a final document—a “Release of All Claims”—and all you have to do is sign to put the entire ordeal behind you. The temptation to sign it immediately, without a second thought, is powerful.

This is a critical mistake. That settlement agreement is not just a receipt; it is one of the most important and legally binding contracts you will ever sign. It is dense with complex legal jargon written by the insurance company’s lawyers for the sole purpose of protecting the insurance company’s interests, not yours.

Signing that document without a full, professional legal review is a massive gamble. You may be unknowingly forfeiting rights, agreeing to unfair terms, or leaving a significant amount of money on the table. Before your pen touches that paper, an experienced attorney must read the fine print.

Useful Information for You: In a Nutshell

• It’s a Binding Legal Contract: A settlement release is not a simple form. It is a final, legally binding contract that permanently ends your rights to any further compensation.
• The Language is Intentionally Broad: Insurers write these releases to be as broad as possible, extinguishing all claims, known and unknown, forever.
• It Doesn’t Account for Liens: The settlement check is not all yours. You may have to pay back your own health insurance or PIP carrier. A lawyer negotiates these “liens” down to maximize the money in your pocket.
• You Could Be Giving Up Other Claims: A poorly written release could inadvertently make you forfeit other potential claims, like one against your own Underinsured Motorist (UIM) policy.
• A Lawyer Protects You: Having an attorney review the agreement is the only way to be certain that the terms are fair and that you are not signing away important rights.

1. Decoding the Legal Jargon (“Releasing All Claims”)

The core of the settlement document is the “release” clause. This language is intentionally written to be as sweeping as possible. By signing, you are agreeing to release the at-fault driver and their insurer from “any and all claims, known and unknown, from the beginning of time to the present day, arising from the accident.”

This means if you discover three months later that you need another surgery, you cannot go back and ask for more money. An attorney will review this language to ensure it is appropriately limited to the specific accident and does not unfairly extinguish other potential rights.

2. Identifying and Negotiating Medical Liens

This is a crucial and often overlooked financial step. The gross settlement amount is not what you put in your pocket. Your own insurance companies—your PIP auto insurer and your health insurer—paid for your medical bills, and they have a legal right to be reimbursed from your settlement. This is called a subrogation lien.

• What a lawyer does: An experienced attorney will not simply pay these liens in full. They will formally contact your insurers and negotiate the lien amounts down. For example, they may be able to get a health insurance company with a $10,000 lien to accept $6,500 as payment in full. This negotiation directly increases the net amount of money you receive.

3. Protecting Your Other Insurance Claims

This is a subtle but critical trap. If you were hit by a driver with low policy limits, you may have a separate Underinsured Motorist (UIM) claim with your own insurance company. Signing an improperly worded release from the at-fault driver’s insurer could accidentally damage or void your right to pursue that separate UIM claim. An attorney will ensure the release language specifically preserves your right to make a UIM claim.

4. Ensuring All Damages are Covered

Your lawyer will do a final check to ensure the settlement amount fairly accounts for all of your damages, including any future medical expenses or lost wages that have been documented in your claim. They ensure the final number aligns with the case they have built on your behalf.

The settlement agreement is the final play of the game, and the insurance company wrote the rulebook. You need a professional on your side to read that rulebook and ensure you are not being taken advantage of.

If you have received a settlement offer for your car accident in the Tacoma area, do not sign anything until you get a professional opinion. Search the Car Accident Lawyer Directory Tacoma to find and compare trusted local attorneys who can provide a free consultation to review your offer and the release documents, ensuring your rights are protected.

References– Washington State Bar Association (WSBA) – The Attorney-Client Relationship:

A consumer guide from the WSBA that explains the role of an attorney as an advocate and advisor, which is critical when reviewing a legal document like a settlement release.
`https://www.wsba.org/docs/default-source/news-public/publications/pamphlets/the-attorney-client-relationship-2015.pdf`

• Washington State Office of the Insurance Commissioner (OIC) – Appealing a denied claim or settlement offer:

  Official guidance on the settlement process, which underscores the finality of settlement agreements.

  https://www.insurance.wa.gov/what-do-if-your-claim-denied-or-you-disagree-settlement-offer