Can an insurance company require you to sign a release of liability for the driver if their policy does not cover total damages?

Asked 11 months ago - South San Francisco, CA

A drunk driver struck my car and two other parked vehicles two months ago. The driver was cited, arrested and the insurance company acknowledged liability. Unfortunately, the driver had the California minimum property damage liability insurance of $5000 per accident. Total damages to my car along was more than $7500. The insurance company is offering me $3200 but is telling me that I must sign a release of any further liability for their driver in order to receive it. Is this legal? Do I have to reject the offered settlement in order to pursue the total damages in small claims court? (Note, I did not have comprehensive coverage on my car, but did have uninsured motorist coverage. I would have received more from my own insurance if the driver had not been insured)

Attorney answers (6)

  1. Manuel Alzamora Juarez

    Contributor Level 20

    9

    Lawyers agree

    Answered . You should talk to your insurance company. You may have under insured coverage. Let them know what the offer is and get their approval before you accept any monies or sign any documents from the other insurance company. Best of luck.

    This answer is provided by California Auto Accident Attorney Manuel A. Juarez, Esq., These answers are not... more
  2. Alan Ray Barnes

    Contributor Level 18

    7

    Lawyers agree

    Answered . Not only is it legal, it's typical. In exchange for a payment of policy limits (or, in your case, a share of policy limits), the insurance company always (or almost always) requires you to sign a release that will prevent you from collecting the rest of the damages from the underinsured driver.

    Talk to your insurance company before you sign anything, though. If you have uninsured motorist property damage coverage, you probably have underinsured motorist coverage, too. If the adjuster claims that you don't, take a close look at the language of your policy. You may need to speak with a supervisor to get the issue resolved.

    If you do not have insurance coverage for the property damage, you can sue the other driver in small claims court. But even if you get a judgment, it's questionable whether you will be able to collect any money beyond what the insurance company is offering.

  3. Robert Bruce Kopelson

    Contributor Level 20

    5

    Lawyers agree

    Answered . His ins co cant pay you in settlement unless you sign a full release. They must get all claimants agree to sign releases before they pay anyone. You dont have to accept their proposal, and can sue for up to 10k in small claims court for property damage. If you can jump on it, and get a judgment, you can then collect part without signing a release, just provide a partial satisfaction of judgment

  4. Christian K. Lassen II

    Pro

    Contributor Level 20

    6

    Lawyers agree

    Answered . It's legal, and the norm

  5. Michael Shemtoub

    Contributor Level 17

    2

    Lawyers agree

    Answered . You should definitely hire a lawyer. You can reject the damages portions and sue the defendant too. Are you still injured? Usually Uninsured Motorist and Underinsured Motorist is all purchased together. IF you call one of us attorneys we'll be able to help you out. We all give free consults.

    I am licensed in California only and my answers on Avvo assume California law. Answers provided by me are for... more
  6. Michael R Crosner

    Contributor Level 20

    Answered . It is normal but you can elect not to sign the release and investigate other options. Worth it to consult with an attorney, especially if you were injured - many attorneys offer free consultations. Good luck

    This is not intended to be legal advise or as legal representation. I am a California personal injury attorney .... more

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