Property Damage vs. Injury Claim: Settle the Car, Never Release the Injury

Published February 21, 2017 · Injury Law Basics

Four days after a rear-end crash on I-675, the other driver's adjuster calls. She is friendly, she accepts fault, and she wants to "get you taken care of." A check for the car can be in the mail this week. There is just one form to sign. For a lot of people in Dayton, that form is the most expensive piece of paper they will ever put their name on, because it quietly ends an injury claim that has not even been valued yet.

Two claims, two clocks

Every crash with injuries produces two separate claims against the at-fault driver's insurance, and it helps to think of them as two different files.

The property-damage claim covers the car: repairs or the actual cash value if it is totaled, a rental while the car is down, towing and storage, the child seat and the laptop that were inside, and the loss in resale value that even a perfectly repaired car suffers. That last item, called diminished value, is real money and is routinely left on the table; see Diminished Value: Your Car Is Worth Less After a Crash.

The bodily-injury claim covers you: medical bills, future treatment, lost wages, lost earning capacity, and the pain, limitation, and disruption the injury causes. Under R.C. 2305.10(A), an injury claim must be brought within two years after it accrues, which in a crash case ordinarily means two years from the collision.

The property claim can and should be resolved in days or weeks. The injury claim cannot be fairly valued until your doctors can say what your injury is and what it will cost over time. Settling the car fast is smart. Settling the injury fast is almost always a mistake, which I explain in Why the Insurance Company Called With a Quick, Low Offer.

The release trap

A release is a contract. In exchange for money, you give up the right to sue. The question is always what you are giving up, and the answer is in the language, not in what the adjuster says on the phone.

A property-damage-only release says, in substance, that you accept a stated amount in full settlement of the damage to your vehicle and its contents arising from the crash on a stated date, and that it does not affect any claim for bodily injury. That is the document you want.

A general release says something very different. Watch for phrases like these:

• "any and all claims" or "all claims of every kind"
• "bodily injury" or "personal injury" anywhere in the document
• "known and unknown," "foreseen and unforeseen," "which may hereafter develop"
• "arising out of" or "in any way related to" the accident
• "heirs, executors, administrators, and assigns"

Sign a document with that language to get a $6,500 check for your car, and Ohio courts will generally hold you to it, even if your neck surgery is diagnosed three months later. Insurers know this. Some adjusters send a general release with the property-damage check as a matter of routine, and some add release language to the back of the check itself. Read the endorsement area before you sign a check, and read every page of every form.

How to settle the car while keeping the injury claim open

Here is the sequence I use for clients, and it works just as well if you handle the car yourself.

1. Tell the adjuster in writing that you are resolving the property-damage claim only and that your bodily-injury claim remains open. An email is fine. Keep a copy.
2. Ask for a property-damage-only release before any check is issued. If the adjuster says the company's form is "standard," ask her to strike the injury language and initial the change, or to confirm in writing that the release is limited to property damage.
3. Do not sign anything that mentions injury, no matter how it is explained. If you are unsure what a document does, send it to a lawyer before you sign it. I review these for free.
4. Document the car before it goes to the salvage yard. Photographs of crush damage, airbag deployment, and the interior are injury evidence, and once the car is gone they cannot be recreated.
5. Get your valuables out and list the damaged personal property with receipts or photos where you have them.

Using your own collision coverage instead

If you carry collision coverage, you have another option: let your own insurer fix or total the car, pay the deductible, and let your insurer recover from the at-fault carrier. That process, called subrogation, usually gets your deductible back to you, and it keeps the other driver's adjuster out of your life while you treat. It also removes the pressure to sign anything with the other company quickly. Your premiums should not rise for a claim where the other driver was at fault, but ask your agent.

The phone calls that come with the car check

Adjusters bundle. The same call that offers to settle the car often asks for a recorded statement about how you are feeling, a medical authorization so the company can "help with your bills," and a quick number to "close the injury side too." Decline all three politely. I explain why in Should You Give a Recorded Statement to the Other Driver's Insurer? A blanket medical authorization lets the insurer pull your lifetime medical history looking for something to blame; it is never required to pay for your car.

What this means for you

Fix or replace your car as fast as the facts allow. Keep the injury claim completely separate, keep treating, and keep every record. Never sign a release that mentions injury, "all claims," or "unknown" claims, and never cash a check with release language on it. If anything from the insurance company confuses you, that confusion is a reason to call, not a reason to sign. Most of the bad outcomes I see in this area were avoidable with a ten-minute phone call.