When you receive a settlement payment on your insurance claim for property damage to your home or business, you may be asked to execute a release. This document should be carefully reviewed by an experienced insurance claims attorney prior to execution because it can prevent you from filing any supplemental claims for subsequently discovered damage.
The Texas case of O’Quinn v. General Star Indemnity Company provides an example of the impact of signing a release where the terms and language have not been carefully evaluated. The insured purchased an insurance policy for her commercial property, a nightclub and restaurant. A fire caused substantial damage to the property. While the insured conceded that General Star made partial payment, the policyholder claimed that the carrier improperly calculated the damage to the property. The insurer issued a check for $429,211, which was accompanied by a release that was executed by the policyholder. The Policyholder’s Property Damage Release indicated that it settled all claims but reserved the right to pursue “a supplemental claim for additional damages, if discovered, and to review and revisit the depreciation calculation”. The insured alleged her supplemental claim was for “additional damages”. The insured also contended that the additional damages involved a mathematical calculation error in the amount of $29,042”. The insured brought suit alleging causes of action for breach of contract, breach of implied covenant of good faith and fair dealing and other claims.
General Star countered by citing the broad language of the release that covers “all claims, demands, actions, liens or causes of action of any kind whatsoever, founded in tort, common law, statute . . . including common law and statutory bad faith claims and claims for unfair claim settlement practices”.
The appellate court agreed with the insurance company that the alleged calculation error did not constitute “additional damages”. The court reasoned that the policyholder was aware of all estimates in the negotiation of the settlement amount and that the insured was aware of the calculations to reach the final payment.
The key point is that even a release that appears to include exceptions might not adequately protect a policyholder. The best practice is to never sign anything provided by an insurance company without having it reviewed by an experienced insurance claims attorney.
You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].