MVA: Liability Release

After a motor vehicle accident, the person not at fault may receive multiple calls from insurance companies. It is important that you understand which insurance company you are talking to.

One of the people you may get a call from is a Bodily Injury adjuster. They work for the at fault person’s insurance company and they deal with compensation for the injuries caused by the accident. Be careful about what you say to this person and always carefully read any documents they give you to sign. Amongst other documents, there is an important legal document called a “liability release” that you must understand before you sign.

What is a liability release?

Liability release forms are contracts that can take different shapes but typically include information on the people who were involved in the accident, the date, information about the motor vehicle accident, and the value offered in return for your signature.

Why is it important understand a liability release before signing?

It is important to know the contents of the liability release because it tells you what rights you are giving away. The reason is that after signing the liability release, you will no longer be able to sue and can no longer make any claim for your injuries. Once the release is signed, it becomes a binding document that terminates the liability of the at fault party and their insurance. The liability release is presumed to be binding in court and the at fault party and their insurance are considered no longer responsible for your injuries.

Takeaways from previous court cases

If you do sign a liability release, it is hard to get out of this contract. The courts have consistently made the decision that “just because injuries show up after you signed the release” or you “find out that you settled too soon” are not reasons to let you out of the contract.

An argument that can be made in rare cases is that the agreement made before the liability release was signed was “unconscionable.” However, this happens where the settlement is substantially unfair to the point that the court can find as a matter of fact that the stronger party used their power over the weaker party to make them sign the liability release. In the end, many applicants who have wanted to go back on a signed liability release had to pay for court costs, lawyer fees, and spend years worrying about the lawsuit just to find out that the liability release was valid.