If any of you have been through the insurance-claim process during Hurricane Ivan you know this.  Hurricane claims can take a long time (sometimes week, months, even years) to fully investigate, inspect, uncover all damages, obtain estimates and invoices, then dispute over the insurance company's estimate, and finally get paid in full.  During this time the insurance company may issue small initial payments, as well as subsequent payments over time.  But, one trick we have seen insurance companies pulling more often in our Hurricane Michael and Sally claims is a request, well before the claim has been fully investigated and adjusted, that the policyholder sign a release to receive their first or an additional payment.  Please, do not do it.  Contact an insurance attorney immediately to learn your rights.  Here is what you need to know about an insurance company's request that you sign a release.

What is a Release?

In simple terms, an insurance release of liability is a legal document that literally “releases” the insurance company of any further obligation to pay you on this claim.  Meaning, by signing, you are giving up your legal right to force the insurance company to pay what is owed under your policy of insurance.  This is true even if you have more damages that are covered.  A signed release allows an insurance company to stop paying on the claim, no matter how much coverage or damages remain.  This is why insurance companies ask you to sign one in order to receive payment.  But, it is only a request.  Remember, your insurance company is obligated under the policy to pay you what you are due, whether you sign a release or not.  Even though you may feel you desperately need that additional, small payment right now, signing a release in order to get it could put you in an even more desperate position further down the road. 

Will It Take Away My Right to Sue My Insurance Company If They Refuse to Pay?

Yes, it can.  Signing a release comes with serious consequences.  Not only will you be giving up your right to recover any more payments on your claim, even though the amount the insurance company paid has not near enough to fully repair your home, by signing a release, you will also be giving up your right to sue your insurance company for failing to pay the full amount.  If your insurance company decides to ignore your estimate and pay only the small amount their adjuster estimated, your only recourse is to sue.  This is what we have to step in and do for policyholders often.  But, if you sign a release, you will be giving up this right and this last chance to finally recover in full.

If Your Insurance Company Asks You to Sign a Release, What Should You Do?

You should contact an experienced insurance attorney immediately.  You need to know what rights you have, the legal consequence of what the insurance company is asking you to sign, and what rights you will be giving up by signing.  Do not assume the insurance company is always looking out for you and explaining everything you need to know to protect yourself.  Remember it is in their best interest to pay you less on the claim.  You deserve having someone looking out for you, making sure your right to recover in full is protected.  If your insurance company has asked you to sign a release or do anything else that confuses or concerns you, please don't hesitate to contact us for a free, no-cost, no-obligation claim review.  We want you to know your rights so you make the best decision to protect them.  We're here to help you.