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What is the purpose of an accident claim release form?

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An auto accident claim release form is a document in which the victim of an auto accident signs and agrees not to file a lawsuit for injuries or harm caused by the accident in exchange for a lump sum payment, according to the Staver Law Group. This agreement includes the inability to file a suit for damages for any future complications that may arise in relation to the accident.

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Because a victim may not be able to judge the future consequences of an accident, it may not be the best decision to sign such an agreement too soon after an accident, warns the Staver Law Group. Injuries could deteriorate and lead to medical costs that add up to much more than the lump sum payment offered by the insurance company. Aside from physical injuries, the victim of an accident may also suffer psychological stress that affects job performance or leads to post traumatic stress disorder. This can lead to lost wages or even the loss of a job,

According to some policies and the laws of certain states, the victim of an accident may need to get permission from his own insurance company before signing such an agreement, explains Nolo. This is because the victim's insurance company may be liable for future damages caused by the accident.

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