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

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. 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 intended to form an attorney client relationship. Manuel Juarez. Esq., is licensed only in California. He practices in Antioch, Berkeley, Concord, Oakland, Hayward, Martinez, Newark, Richmond, San Francisco and San Rafael. This information is good only in California and it is not to be taken as legal advice on car accidents, personal injury, divorce, bankruptcy or in any other type of situation. Esta respuesta es del Abogado de Accidentes de Autos, Abogado de Lesiones Personales, Abogado de Heridos en Accidentes de carros, Manuel A. Juárez, Abogado Hispano de Accidentes, Abogado de Divorcios, Abogado Latino de Accidentes, Abogado de Accidentes de Oakland, Hayward, San Francisco, California. Estas respuesta son solo para información general y no consisten en consejo legal sobre divorcios, mantención de esposas, mantención de hijos o bancarrotas. Las respuestas son comentarios legales que no forman una relación de abogado y cliente. Manuel Juarez, Esq., esta licenciado solo en el Estado de California. El abogado de lesiones y heridos en accidentes de autos, Manuel A. Juarez es licenciado solo en California.


  2. 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. It's legal, and the norm


  4. 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


  5. 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 general information only. They are not legal advice. Answers must not be relied upon. Legal advice must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. I provide legal advice during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us. The communications on this website are not privileged or confidential and I assume no duty to anyone by my participation on Avvo or because I have answered or commented on a question. All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice in answer to any question, if you are an interested party you should promptly and personally consult with an attorney for legal advice. Also, see Avvo's terms and conditions of use, specifically item 9, incorporated by this reference


  6. 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 . Be aware that every state has its own statute of limitations; and statutes & case laws that govern the handling of these matters.

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