Can someone sue you after insurance pays? Does a settlement prevent a civil lawsuit?
Can someone sue you after insurance pays? Generally, an insurance settlement will close the case. However, there are exceptions to this. If you’ve already accepted a settlement from the insurance company, then it makes it difficult – but not impossible – to file a lawsuit.
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UPDATED: Jun 28, 2024
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UPDATED: Jun 28, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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In the United States, car accidents are routinely followed by lawsuits.
Are you able to sue someone after an insurance payout? Does getting a settlement from an insurance company prevent a civil lawsuit? Today, we’re answering those questions and explaining everything you need to know about suing someone – or getting sued – after a car accident.
Agreeing to an Insurance Settlement Typically Prevents Further Lawsuits
Generally, an insurance settlement will close the case. The settlement is designed to wrap everything up. That means you will not be able to seek further compensation for that case beyond the settlement you already received.
However, as any auto insurance lawyer will tell you, there are always exceptions to this rule. If you’ve already accepted a settlement from the insurance company, then it makes it difficult – but not impossible – to file a lawsuit.
When an insurance company settles a claim, the insurance company is agreeing to pay a certain amount of money to wrap up the entire claim. The settlement agreement will include language that prevents the victim from asking for more money in the future.
As the victim, you’ll need to sign a waiver or release to accept the cash settlement. This waiver is a legally binding contract. It prevents you from making any further claims. There are few exceptions. Once you sign the contract, you cannot pursue further compensation.
A settlement agreement might state that the victim will receive $100,000 for medical expenses and pain and suffering following an accident, for example. In exchange for accepting that settlement, the victim will agree to not seek further compensation from future lawsuits.
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How to File a Lawsuit After a Car Insurance Settlement
A settlement agreement will clearly state that no further compensation will be given to the victim from the car insurance company.
What if the victim discovers that the settlement was a bad deal? What if the victim’s injuries are more severe than initially reported? What if a minor injury turns into a lifelong disability?
In this situation, it’s possible for the victim to ignore the terms of the settlement and file a lawsuit for extra compensation. Due to the terms of your settlement, however, your lawsuit will likely be dismissed from court immediately.
Filing a lawsuit is as straightforward as submitting legal documents to a court and paying the required fees. You can file a lawsuit on your own. Or, you can hire a lawyer.
Filing a lawsuit after you’ve accepted a settlement is very easy. There’s nothing preventing you from filing a settlement. However, actually winning that settlement is a whole different story.
You May Have Trouble Winning the Lawsuit
Yes, you can file a lawsuit after you’ve agreed to a settlement with the insurance company.
However, it’s very possible that the judge will throw your lawsuit out of the court. After hearing your lawsuit, the defendant will inform the judge of the settlement agreement. At this point, the judge might dismiss the lawsuit. After all, the settlement agreement clearly states that you agreed to pursue no further compensation.
If the judge dismisses your lawsuit for this reason, then you might be on the hook for all legal fees and other costs of the defendant. Your post-settlement lawsuit could end up costing you thousands of dollars.
Are There Any Exceptions? Can I Ever File a Lawsuit After a Settlement?
To avoid having your lawsuit dismissed, you’ll need to convince the judge that you have a solid reason for filing the lawsuit.
In rare cases, you might be able to file a lawsuit after you’ve agreed to a settlement.
If you can prove you agreed to the settlement due to fraud or coercion, for example, then you may have a case.
Generally, however, you’re responsible for reading and understanding any contracts you sign.
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Do Not Sign Any Settlement Offers Until You Fully Understand the Damages
If you’ve been involved in a serious car accident, then you may be owed significant compensation.
Car insurance companies know this. That’s why they’ll try to close your case as quickly as possible. They might dazzle you with a big cash offer soon after your accident, for example.
You might be required to pay thousands of dollars per year in medical costs and medication for the rest of your life after a car accident. The initial cash settlement offer might look large. However, it might not be adequate compensation for a lifelong disfigurement or disability.
For that reason, it’s important you avoid signing any settlement offers until you fully understand the damages, medical costs, lost wages, pain and suffering, and other expenses you’ve incurred. Consider hiring a car accident attorney to ensure you get fair treatment.
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Navigating Post-Settlement Legal Scenarios
Understanding the complexities of legal actions post-settlement is crucial. Many people ask, can you sue someone after settling with their insurance in California, especially when unforeseen issues arise. While settlements typically prevent further lawsuits, questions like can you still sue after a settlement often emerge if new injuries or damages are discovered.
It’s essential to know your rights and whether can you sue again after a settlement in such scenarios. Reading civil car insurance reviews can provide insight into policies that offer the best protection and clarify what might happen if someone sues you for more than your insurance covers.
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Conclusion
When you sign a settlement with a car insurance company, you’re agreeing to receive money in exchange for closing the case. You might agree to receive $100,000 from the car insurance company in total compensation for your vehicle damage, medical expenses, lost wages, and pain and suffering. In order to get this money, you must sign a waiver and release. This waiver and release prevents you from taking any further legal action against the insurance company.
That waiver or release is a legally binding contract. You are bound by the terms of that contract. There are limited exceptions to this rule.
If you feel you have a legitimate reason to sue a car insurance company after a settlement has been reached, then contact a car accident lawyer today. Your options may be limited, however, and it’s typically difficult to file a lawsuit after a car insurance settlement has been reached.
Frequently Asked Questions
Can you sue someone after settling with their insurance?
Generally, you cannot sue someone after settling with their insurance because the settlement usually includes a release of further claims.
Can you sue after signing a release?
Once you sign a release, you typically cannot sue because the release is a legal agreement to forgo further legal action in exchange for the settlement.
Can someone sue you after insurance pays in Florida?
In Florida, someone can potentially sue you after insurance pays if the settlement does not cover all their damages or if the release was not comprehensive.
Can someone sue after a car accident is settled?
Typically, someone cannot sue after a car accident is settled, as settlements usually include a release of further claims. Exceptions exist if fraud or new information comes to light.
Can someone sue you after insurance pays in Texas?
In Texas, someone might sue you after insurance pays if the settlement is insufficient or if all damages are not covered by the insurance payout.
What happens if someone sues you after a car accident in Michigan?
If someone sues you after a car accident in Michigan, you may need to defend yourself in court. Your insurance should provide legal defense and cover damages up to your policy limits.
What to do if someone sues you for a car accident in Georgia?
If someone sues you for a car accident in Georgia, contact your insurance company immediately for legal assistance and representation, and consider consulting a personal injury attorney.
What happens if you sue your own insurance company?
If you sue your own insurance company, you may enter a legal dispute where you must prove that the insurer has failed to meet its contractual obligations. This can result in a settlement or court judgment in your favor.
What happens when an insurance company sues you?
When an insurance company sues you, they are seeking to recover money paid out on a claim. You will need legal representation, and your insurance may cover your defense.
How much can someone sue for a car accident in Massachusetts?
In Massachusetts, someone can sue for a car accident for damages including medical expenses, lost wages, and pain and suffering. The amount can vary widely depending on the case specifics.
What happens when someone sues you and you have no money?
If someone sues you and you have no money, they might obtain a judgment against you, which could lead to wage garnishment, liens on property, or other collection methods. You may need to explore bankruptcy as an option.
What factors determine the amount of an insurance settlement?
The amount of an insurance settlement is influenced by various factors, including the severity of injuries, medical expenses, property damage, lost wages, and pain and suffering.
Can I negotiate the terms of an insurance settlement?
Yes, you can negotiate the terms of an insurance settlement. It’s recommended to consult with an attorney who can help you navigate the negotiation process and advocate for your best interests.
How long does it typically take to receive an insurance settlement?
The timeframe for receiving an insurance settlement can vary. It depends on factors such as the complexity of the case, the insurance company’s processes, and any negotiations involved. It may take weeks to months to reach a settlement.
Can I reopen a settled insurance claim if my condition worsens later?
Once a settlement is reached and the case is closed, it’s generally challenging to reopen the claim. It’s crucial to thoroughly evaluate the settlement offer and consider potential future complications before accepting it.
Can I sue for punitive damages in an insurance lawsuit?
Punitive damages are awarded to punish the defendant for egregious conduct. In insurance lawsuits, punitive damages may be sought in cases involving willful misconduct or gross negligence. Consulting with an attorney can help determine if punitive damages are appropriate in your case.
What should I do if the insurance company offers a low settlement?
If you believe the insurance company’s settlement offer is too low, you can negotiate with them or seek legal assistance. An attorney can assess the value of your claim and negotiate on your behalf to secure a more favorable settlement.
Can someone sue you for a car accident if you have insurance in California?
Yes, someone can still sue you for a car accident even if you have insurance in California.
Does auto insurance cover civil lawsuits?
Yes, auto insurance typically covers civil lawsuits related to car accidents.
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Jeff Root
Licensed Insurance Agent
Jeff is a well-known speaker and expert in insurance and financial planning. He has spoken at top insurance conferences around the U.S., including the InsuranceNewsNet Super Conference, the 8% Nation Insurance Wealth Conference, and the Digital Life Insurance Agent Mastermind. He has been featured and quoted in Nerdwallet, Bloomberg, Forbes, U.S. News & Money, USA Today, and other leading fina...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.