If we cash a check for a car accident settlement check, does that negate further lawsuits for payments?

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If we cash a check for a car accident settlement check, does that negate further lawsuits for payments?

We were in a car accident. The other party’s insurance company found us 70% liable. They gave us a check for the 30% they claim they were liable for. We appealed, as we thought we could prove the other party was 100% at fault. They denied that. We are now going to take the other party to small claims court. If we cash that check from the insurance company, does doing that make any further appeals/lawsuits null and void? Or, can we cash the check and still go on to try to get the remainder from the other party?

Asked on April 30, 2012 under Accident Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You most likely cannot sue the other party. Typically, when a driver's insurance company offers you payment, that payment is in settlement of the claim; having accepted the payment, you accept it as payment in full of the claim.

There are exceptions:

1) If the payment is specifically for damage to your car but not for personal injury, you may still be able to sue for personal injury, or vice versa--in other word, the check will settle those types of claims for which it is for, but will not necessarily settle different claims.

2) If the coverage was maxed out--i.e. you are paid the highest amount (the policy limits) which you could be paid under the policy, you could sue for amounts in excess of that, if you can prove greater damages.

3) If you are paid by the insurer for party A, you could still sue other party B.

Before deciding what to do, review any agreements, the correspondence with the insurer, etc.--what exactly are they paying you for, and what is that payment in settlement of?  That is the first step in determining whether you may be able to seek additional compensation. If uncertain, bring the check and all documentation to an attorney to review with you.


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