The insurance company is pushing you to settle your case for $35,000. Your doctor says you’ve improved significantly and should continue getting better. Six months after signing the release, chronic pain develops and you need surgery your doctor never anticipated. Now you’re facing $80,000 in medical bills with no way to reopen your case.
Our friends at Andersen & Linthorst discuss how premature settlements represent one of the most common and costly mistakes injury victims make. As a birth injury lawyer will tell you, once you sign a settlement release, you’ve permanently given up your right to additional compensation even if your injuries turn out far worse than anyone predicted.
Settlement Releases Are Final And Binding
When you settle an injury claim, you sign a release that permanently closes your case. This legal document states you’ve received full compensation for all injuries, known and unknown, arising from the accident. The language is intentionally broad to prevent future claims.
Courts strictly enforce these releases. The finality of settlement serves important policy interests including allowing parties to resolve disputes with certainty and move forward. Buyer’s remorse doesn’t justify setting aside a settlement you voluntarily accepted.
Very limited exceptions exist for fraud, mutual mistake, or duress, but these are extraordinarily difficult to prove. Simply discovering your injuries were worse than you thought doesn’t meet the legal standard for invalidating a release.
Why Insurance Companies Push Early Settlements
Insurance adjusters have strong incentive to settle your case before you understand the full extent of your injuries. Early settlements save them money because injury severity often becomes apparent only with time.
They’ll emphasize your current improvement, suggest waiting serves no purpose, and warn that delays might result in lower offers. These pressure tactics aim to get you to settle before complications develop, additional treatment becomes necessary, or permanent limitations manifest.
The settlement offer might seem substantial compared to your current medical bills. What you don’t realize is that it’s nowhere near adequate compensation for the surgery, rehabilitation, and lost wages you’ll face when your condition deteriorates next year.
Injuries That Commonly Worsen Over Time
Certain injury types carry high risk of delayed complications or progressive worsening. Settling these cases before reaching maximum medical improvement almost guarantees you’ll be undercompensated.
Traumatic brain injuries often show delayed symptoms. Initial recovery might seem complete, but cognitive difficulties, mood changes, and chronic headaches emerge months later. By then, your settlement is spent and you’ve released all claims.
Back and neck injuries frequently require eventual surgery even when initial treatment involves only physical therapy and medication. Herniated discs that respond temporarily to conservative care often deteriorate to the point where surgical intervention becomes necessary.
Joint injuries including torn cartilage or ligament damage sometimes lead to early-onset arthritis requiring joint replacement decades before normal aging would cause such degeneration. Settlement at age 30 might not account for the knee replacement you’ll need at 45.
The Maximum Medical Improvement Standard
We advise clients not to settle until reaching maximum medical improvement, the point where doctors believe you’ve recovered as much as you’re going to. This might mean waiting months or even years after the accident before settlement discussions make sense.
Maximum medical improvement doesn’t mean complete recovery. It means your condition has stabilized and further significant improvement is unlikely. At this point, doctors can provide reliable opinions about permanent limitations, future medical needs, and long-term prognosis.
Settling before this point means gambling that your injuries won’t worsen or require additional treatment. Sometimes that gamble pays off. Often it doesn’t, leaving you with inadequate compensation and no recourse.
Future Medical Expenses
Quality settlement negotiations account for future medical costs related to your injuries. If you’ll need ongoing physical therapy, pain management, or eventual surgery, those expenses should be included in your settlement demand.
Estimating future medical costs requires medical opinions about what treatment you’ll likely need and life care planning professionals who can calculate lifetime care costs for serious injuries. This analysis can’t happen until your condition stabilizes enough for doctors to make reliable predictions.
Early settlement means accepting the insurance company’s low estimate of future medical needs or forgoing compensation for those costs entirely. When the predicted treatment becomes necessary, you pay out of pocket.
Structured Settlements And Their Limitations
Structured settlements provide periodic payments over time rather than a lump sum. They’re sometimes proposed as protection against worsening injuries by spreading compensation across years.
However, structured settlements don’t solve the finality problem. The payment schedule gets fixed at settlement based on predicted needs. If your condition worsens beyond predictions, you can’t increase the future payments. You’re locked into the agreed schedule regardless of changed circumstances.
Structured settlements serve other purposes including tax benefits and preventing recipients from spending lump sums too quickly. They don’t provide additional compensation if injuries worsen.
Reopening Settlements Is Nearly Impossible
People sometimes ask whether they can reopen their settlement if injuries worsen significantly. The answer is almost always no. The narrow exceptions that allow setting aside releases rarely apply to simple cases of injuries being worse than expected.
Fraud requires proving the insurance company or defendant intentionally misrepresented material facts to induce your settlement. Them lowballing the offer or failing to disclose that they knew your injuries were severe doesn’t meet this standard.
Mutual mistake means both parties misunderstood a basic fact underlying the settlement. You thinking your injuries would improve when they actually worsened isn’t mutual mistake because the insurance company typically makes no representations about your prognosis.
The Pressure Of Financial Need
Many injury victims settle prematurely because they desperately need money. Medical bills pile up, lost wages create financial hardship, and the settlement offer represents immediate relief from crushing pressure.
This reality drives thousands of inadequate settlements annually. People who should wait another six months to understand their prognosis accept lowball offers because they’re facing eviction or can’t feed their families.
We sometimes arrange for medical providers to work on liens, deferring payment until settlement. We help clients access other resources to survive financially while waiting for their condition to stabilize. These efforts aim to prevent financial desperation from forcing premature settlement.
Second Accidents And New Injuries
Settlement releases cover only the specific accident at issue. If you settle your 2024 car accident case and then get hit by another driver in 2025, the new accident creates a separate claim unaffected by your previous settlement.
However, proving which accident caused which injuries becomes complicated when you’ve had multiple similar accidents. Insurance companies will argue your current problems stem from the settled case rather than the new accident.
Pre-existing injuries from settled cases also reduce recovery in new cases under the eggshell plaintiff rule’s inverse application. You can’t claim the new accident caused conditions that already existed from previous trauma.
Partial Settlements
Some jurisdictions allow settling certain aspects of your case while preserving claims for other injuries. For example, you might settle your property damage claim while keeping your injury claim open, or settle claims for identified injuries while reserving rights regarding potential future complications.
These arrangements require carefully drafted settlement agreements specifying exactly what gets released and what remains open. Not all defendants agree to partial settlements, preferring to resolve all potential liability at once.
What Settlement Documents Actually Say
Settlement releases use specific legal language designed to maximize the defendant’s protection. Common provisions include:
- Release of all known and unknown injuries from the accident
- Waiver of claims for future medical expenses and complications
- Agreement that the settlement represents full compensation
- Acknowledgment that injuries may worsen and you accept that risk
- Promise not to file any future claims related to the accident
Reading these documents carefully before signing is essential. Once executed, the release governs your rights regardless of what you thought you were agreeing to.
Insurance Company Medical Examinations
Before settlement, insurance companies often require independent medical examinations by doctors they select. These doctors typically minimize injury severity and predict favorable outcomes.
If you rely on these optimistic prognoses when deciding to settle, you have no recourse when they prove inaccurate. The examining doctor owed no duty to you and made no guarantees. Their opinion served the insurance company’s interests, not yours.
Trust your own treating physicians’ opinions about prognosis and future medical needs. They know your case intimately and have no financial incentive to underestimate your injuries.
The Role Of Attorney Advice
We have a professional duty to advise clients about settlement timing and risks. When medical evidence shows uncertain prognosis or risk of worsening, we counsel waiting despite client pressure to settle immediately.
Sometimes clients reject this advice and settle anyway. While we respect client autonomy in settlement decisions, our obligation includes ensuring clients understand the permanent finality of settlement and the risk they’re accepting if injuries worsen.
If you’re considering settling your injury case but haven’t reached maximum medical improvement or have concerns about whether your condition might worsen, reach out to discuss proper settlement timing, how to account for future medical needs, and strategies to avoid premature settlement that leaves you without recourse when complications develop.
Disclaimer: This content should not be construed as legal advice.
