One of the ways an insurance company manages its risk of losses is to require insured people to sign damage release forms. A damage release provides that the insurer has satisfied its obligations with respect to a particular claim. The typical case where a release form is requested comes when an insurance company makes a payment which, in its view, satisfies its obligations toward the insured with respect to a claim.
In a simple case, such as when the insured has made a claim for well-understood and easily quantified property damage, providing a release may have little downside. But in more complex cases, damages may only come to light over time. Cases involving personal injury are often like this, simply because recovery doesn’t always follow a predictable course. People who are dealing with complicated situations should be mindful of a couple important features of damage releases.
The first is that a release may not be completely obvious. Although an insurer may risk being accused of bad faith or unfair tactics, it may nevertheless try to “hide” a damage release. It might do this by incorporating the release into a bigger document that it asks the insured to sign. Or it may make the release automatic upon the insured cashing a check. Reading everything the insurance company sends to you is critically important. Don’t be afraid to ask questions.
A second important feature is that a valid damage release may prevent reopening a claim. The reason insurance companies ask for releases is to give them certainty that their obligation with respect to a claim is finished. There are perfectly valid reasons why insurers want to do this. It helps them close their financial books and keep tabs on their risk. But for the insured it can also create a significant problem if the initial claim didn’t capture the full scope of losses from an incident. By signing a damage release the insured may close—and lock—the door to getting additional coverage for a loss. A sympathetic agent at the insurer may have no option to reopen the claim once the release has been signed.
In a case where the injured person is being helped by an attorney the best course of action is to let the attorney handle the insurance process. An experienced personal injury attorney has the training to understand the technicalities of insurance claims and can recognize when something isn’t right. Protecting clients from inadvertently signing away their rights to better coverage is just one small part of the bigger picture.
For more than 45 years the law firm of Greenman Goldberg Raby Martinez has represented clients in personal injury cases. Our attorneys are available for free consultations to discuss your injury, your insurance options, and the legal particulars of your case. We can be reached at 702-388-4476, or ask us to call you through our contact page.