The Scoop on Auto Accident Release Forms: What You Should Know

What Is an Auto Accident Release Form?

The auto accident release form is a legal agreement that concludes the liability of one or all parties in an auto accident. When you submit a claim against the other driver, you may be asked to accept an auto accident release form to relinquish your right to sue the other driver after he/she agrees to compensate you.
When you submit a personal injury claim to the other party’s insurance company, you are required to sign it to show that you agree to the terms. This agreement is put into a legal document called an auto accident release form. The purpose of this form is to close the case and end the legal liability of the at-fault party in the accident. When the form is signed, both parties (the injured party and the at-fault party) have agreed to the terms in the form .
When you sign the auto accident release form, you are agreeing to the terms of the compensation that has been offered by the insurance company. By signing the form, you are ascending to the settlement agreement with the at-fault driver and his/her insurance company. This is why it is very important that you educate yourself on all of your compensation options and the specifics of the accident before you sign anything.
The terms you see on an auto accident release form will vary by case. It is up to both parties to come to an agreement on how much compensation will be paid. By signing the form, you are agreeing to accept the terms and conditions of the compensation. The terms of the form cannot go above and beyond what you agreed to when the case was presented to the insurance company. If the case is closed and you sign the form, you cannot go back and ask for more compensation later on.

The Components of a Release Form

A properly drafted release is a contract and must contain the following elements:
Parties: It must clearly identify the parties involved, including the releasor/released and those granting and receiving the consideration for the release.
Recitals or background: A statement must be made of the facts, circumstances or events giving rise to the claim, cause of action, damages or injuries to the releasor, and referring to the parties to the release in its reference to the facts, injuries and claims. Without a proper recitation of facts, the release may be voided as failing basic contract principles.
Scope of Release: A detailed and unambiguous description of the exact nature of the claims and causes of action being released. A release could extend to any and all claims based on claims or causes not yet discovered, but if this is desired, it is extremely important to use clear and unambiguous language to avoid an argument that the releasor failed to understand the scope of what they were releasing.
Confidentiality: Releasing information regarding the terms of the agreement to third parties.
Confidentiality can be a very important element, especially in personal injury cases which are often inherently confidential in nature, since the client’s condition is often private and the case itself usually involves a request to compensate the client for painful and disabling injuries and some time loss from work due to these injuries and the pain caused. The release should state that the funds paid to the client are confidential and not subject to disclosure to any third party, but only to competent taxing authorities with the exact same clause as appears in the release document itself such as, "This release agreement may NOT be disclosed to any third party, except government taxing authorities."
Indemnification provision: Providing for protection against a claim that the plaintiff has damages from a source outside of the action, and perhaps for which he or she was already compensated.
Dispute resolution or mediation clause: Including this shows the parties’ intent to settle any disputes which may arise pursuant to the agreement without litigation. It could also be used as evidence that the case should be mediated in the prior action under the old rule for mandatory mediation.
Governing law: Provide the state law which will govern the application and interpretation of the terms of the agreement.
Execution: The signed date, printed name and status of the individual signing the document – it should specifically identify whether it is the released or releasor signing the release.
Names of released and releasor: Individuals and corporations are often involved in auto accident litigation and it is important here to identify the proper entities.
Quasi-judicial recognition: The language of paragraph must recognize the implications for a court proceeding that the parties acknowledge that the agreement is legally binding and enforceable, and sufficiently conspicuous so that a person knows it exists and that it constitutes an intention to be bound by it without further inquiry.

When to Consider Using a Release Form

There are various situations in which an auto accident release form can be useful for both parties involved in an accident.
Release Form Between Two Uninsured Drivers
In some cases, both parties may be uninsured, and therefore will have to rely on each other to act in good faith and to proceed from there. A release form signed between the two parties at the scene of the accident can be helpful in protecting both parties from liability. With this signed release form, if the other party then attempts to sue and make a claim later on, the release form can act as a defense to the claim in court.
If you have been in a hit-and-run accident recently, then a release form signed with the other driver if you are able might help you defend against liability. While remaining calm at the accident scene, you can convince the other driver to sign a release form stating that they will not pursue a claim against you. If you are considering leaving the scene after the accident, then it’s wise to ask the other party to sign the release while making promises that you will pay the cost of the damages.
Another situation where you might use a release form is if the other party is a family member or someone with whom you have a close relationship – this is because you might suspect that the other party will be reasonable and proceed in good faith. It’s still important to have a release form signed. Without it, the other party could hire a personal injury lawyer and try to obtain a settlement all on their own. The signed release form will protect you and provide you with a defense against a voided claim in court.
If you agree to pay for the damages even without an insurance policy, you can use a release form to protect yourself from a subsequent claim by the other party.

Pros and Cons of a Release Form

The advantages and disadvantages of auto accident release forms may not mean much when you are sitting in the hospital or at home recovering or wondering how you are going to pay your expenses now that your car is destroyed.
Initially, the advantages of these forms seem clear. You receive a settlement that is in your hands and you get closure. You are certainly "bought out" of future claims if you sign one of these contracts and collect money (or an item of value such as a car). A release also will be beneficial if someone else has a claim against you as an at-fault motorist who caused serious injuries or even death and that person decides to sue you. Your insurance company will represent you in that case but your personal assets may be exposed if you do not have adequate liability insurance coverage for this sort of accident.
Sometimes these documents can compromise or adversely affect the rights of an injured party. A car accident plaintiff may find out later that he or she had an undisclosed pre-existing medical condition such as herniated disc or Alzheimer’s Disease that was aggravated by the accident and worsened with time. In these situations, the plaintiff could be quite severely harmed if he or she signs a full release for a comparatively small sum and fails to pursue legal action for the exacerbation of the medical condition .
Again, the risk involved here is affected by the extent of any pre-existing medical condition and the severity of the injuries that were suffered in the accident. In the above-mentioned example, the plaintiff may have been offered $100,000. However, his injuries were so severe that he is now 100 percent disabled. He will require lifelong medical care and may end up never being able to work again if his condition was sufficiently serious. It is questionable whether the plaintiff would be able to reopen his case and obtain a larger sum if he signed a release for the smaller amount.
Sometimes, insurers themselves may want the plaintiff to sign a full release form and, in some cases, this is inappropriate. For example, such agreements should not be signed before medical treatment is completed and before full recovery or maximum medical improvement is reached.
In some cases, the parties may be in a unique situation, such as where the second driver was driving the first driver’s rental car during his vacation and the rental company is the one that is responsible for covering the damages. In this case, the rental car agreement may have a clause that indirectly binds the rental company to the agreement between the two drivers. One way around this is for the second driver to ask the rental car company to accept responsibility for damages, while the same time seeking to hold the first driver harmless.

Legal Implications

It’s common for insurance companies to ensure you are signing away your rights to future litigation before they approve a settlement. They will often attempt to get you to sign a release form, which some clients are not fully aware is available for negotiation as well, and as unfairly worded as possible in the favor of the insurance company when you may be considering some form of settlement. Do keep in mind that in the busy business of law suits, defence lawyers for the other side may act fairly and fairly represent your interests, however, they may unfairly word the document towards the benefit of their own client once it crosses their desk.
Though no one ever wants to envision that they will continue to have issues stemming from a motor vehicle collision or crash years down the line – because who could possibly have foreseen that would happen – but we are all human, and it does happen. Once you sign a form and release your rights, you will be giving up your chance at pursuing compensation for your medical, psychological, or other damages or injuries in the future as a result of that collision. It’s important to read all forms you are sent by your defence lawyer thoroughly. If you are unsure of the language being used or how it impacts your case, bring it to the attention of your lawyer immediately and he or she can explain it to you, or carefully reword and draft the contract to be in the best interest of you, the client, and not the insurance company. Trust your instincts when it comes to your case. If something is unclear, or you feel rushed to sign, it is definitely worth it to ask questions, and if necessary, call upon another professional outside your team to confirm and clarify your specific situation.

Best Practices for Negotiating a Favorable Release

When negotiating the terms of an auto accident release form, there are several strategies you can employ to ensure a fair compensation and to protect your rights. First and foremost, it is critical to thoroughly review the terms of the release form and any associated documentation to fully understand what you are agreeing to. Ensure that the form does not waive any future claims or injuries that may arise as a result of the accident, as these will not be compensated under the terms of the release.
Make sure that the amount you are being compensated for your injuries, medical expenses, property damage, and other damages is fair and adequate to cover your current and future expenses related to the accident . If necessary, obtain supporting documentation such as medical records and estimates of damages to present an effective case for fair compensation.
Additionally, do not rush the negotiation process. Take your time and consult with an experienced auto accident attorney to ensure you are not agreeing to more than you are entitled to or waiving your rights to future compensation. It is also important to consult with any involved insurance companies and follow proper procedures and timelines to ensure all parties are fully informed of the release terms and all supporting documents are received and reviewed in a timely manner.