Signing an Insurance Release Before the Settlement Check Arrives

Attorney Answer

Do not sign the release until the settlement number is in writing and you are certain about the full extent of your injuries and your repair costs — a release is final, and once you sign it the claim is closed even if the damage turns out to be worse than the number the adjuster gave you on the phone.

An adjuster asking you to sign before the check is cut is normal and is not by itself illegal. What matters is what the release says. A general release usually closes out everything arising from the incident — bodily injury as well as property damage — not just the item you were discussing on the call.

Texas does regulate how adjusters and insurers behave. Tex. Ins. Code § 541.060(a)(1) prohibits misrepresenting to a claimant a material fact or policy provision relating to the coverage at issue, and Tex. Ins. Code § 541.060(a)(2) prohibits failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement once liability has become reasonably clear. Tex. Ins. Code Ch. 541 reaches adjusters, not only insurance companies. So if you were told the offer expires today, or that this is all the policy allows, and that is not true, that is the kind of statement the chapter addresses.

The claim-handling deadlines people usually have in mind are in Tex. Ins. Code Ch. 542, Subchapter B, the Prompt Payment of Claims Act. Read Tex. Ins. Code § 542.051 first, because it decides whether those deadlines are yours to use: they apply to a first-party claim, one payable by an insurer to its own insured or a named beneficiary. If you are a third-party claimant dealing with the other side's adjuster, the Prompt Payment Act deadlines do not run in your favor at all.

If this is your own insurer, the deadlines are: acknowledge the claim and begin investigating within 15 days of notice; notify you of acceptance or rejection within 15 business days after receiving everything it asked you for; and pay an accepted claim within 5 business days after giving notice of acceptance. Late payment carries statutory interest and attorney's fees. Notice what starts those clocks — the insurer's receipt of the claim, and its own notice of acceptance. Signing a release does not start any statutory payment clock. If an adjuster tells you that signing is what gets the money moving, that is not what the statute says.

What you can do

1. Ask the adjuster to email you the release and a written breakdown of what the offer covers, before you sign anything. 2. Read exactly what it releases. If it releases all claims, or mentions bodily injury, and you are still treating or still collecting estimates, do not sign it. 3. If you have injuries at all, finish treating or get a written prognosis before you release an injury claim. There is no reopening it afterward. 4. If you are the insured on the policy, put the claim and every document request in writing so the Tex. Ins. Code § 542.051 clocks have a documented start date. 5. Ask in writing when the check issues relative to signature, and keep the answer. 6. Save any recording, email, or dated note of what you were told. That record is what a Chapter 541 complaint or claim is built on. 7. You can file a complaint with the Texas Department of Insurance while the claim is still open; doing so does not close your claim.