Normally, an insurance company asks the claimant that has agreed to settle to sign a release. That is meant to protect the insurance company from future lawsuits.
Possible reasons why former claimant might give thought to a post-settlement lawsuit
• A treated wound has failed to heal entirely.
• A former claimant has detected the existence of a previously unnoticed injury.
• Complications have developed, during the treatment of a given injury, or in an injury that was supposed to be fully healed.
• For all of the above situations, the terms in a signed release block pursuit of a post-settlement lawsuit.
Exceptions to the rule that forbids initiation of a post-settlement lawsuit, if a former claimant has signed a release
• The paperwork signed by the claimant did not really contain a release.
• The terms of the agreement signed by the claimant were found to have been unfair, vague, overly broad or confusing.
• Evidence has been uncovered that shows a willingness on the part of the other side to violate the signed agreement.
• The insurance company has acted in bad faith.
How could an insurance company act in bad faith?
It could deceive the person that has chosen to buy one of the company’s policies. For instance, it could suggest the existence of coverage that was not mentioned in the policy sold to the deceived customer. Personal injury lawyer in Watsonville know that insurance companies must follow the guidelines laid down by the state in which they operate. If the state has put limit on the amount charged for a certain type of policy, insurers are expected to sell policies that do not cost more than that limit. Those that ignore the state’s regulations can be charged with acting in bad faith.
Any company that sold insurance policies could pressure the claimant to settle and to sign a release. It might do that by applying duress or actual threats. That is a decidedly visible and unquestionable demonstration of bad faith
A similar action to the one described above is called coercion. Coercion involves compelling someone to do something, normally something that he or she hesitates to do. Coercion does not make use of threats. Instead, it suggests the need to enforce performance of a desired action. An insurer could arrange for the company’s representatives to withhold some of the facts that appear to have delayed the signing of the settlement. Insurance companies welcome an early settlement, because the signing of a release follows it.
Policyholders should know that an insurance company’s readiness to agree to a settlement does not guarantee the company’s compliance with all the terms of that same settlement. Some insurers have their representatives sign the settlement document, despite having no plans to follow the stated stipulations.