Release
What Does Release Mean?
A release is a legal agreement between two parties that prevents one party from pursuing any further claims, court litigation, or actions against the other. Insurance companies often require individuals to sign a release form after covering damages to protect themselves from future liability or additional payouts.
The amount of coverage a driver carries plays directly into how these settlements get negotiated, since insurers will only pay up to the policy limits before the injured party has to pursue the at-fault driver personally. If you’re unsure how much protection makes sense, our guide on how much liability insurance you need walks through the typical limits drivers carry.
Insuranceopedia Explains Release
A release, or settlement release, is typically signed in exchange for monetary compensation provided to a person after an accident causing bodily harm or property damage. Insurance companies issue this payment to absolve themselves and their policyholders of any future claims. This is achieved by requiring the injured party or property owner to sign a settlement release.
Once the release is signed, the injured party or property owner forfeits the right to sue the responsible party or demand additional compensation. Therefore, individuals are strongly advised to carefully review the settlement release or consult a lawyer before signing, as the release is a legally binding agreement, also referred to as a “release contract.” If you’ve been in a collision and aren’t sure what comes next, our guide on what to do after a car accident covers the steps that lead up to a settlement offer.
