Navigating the aftermath of a motor vehicle accident can be daunting, especially when it comes to dealing with insurance claims and potential settlements. Among the various options presented to you, a ‘full and final settlement’ of your accident benefits claim is a proposal sometimes offered by your insurer aft er you appeal the denial of various accident benefits to the Licence Appeal Tribunal (LAT).

What does it mean to accept a full and final settlement of your accident benefits claim? How does it impact your rights as a claimant, and how can it influence your future, particularly if your injuries have long-lasting effects?

By examining what a full and final settlement is, the risks of accepting it, and how a lawyer helps you accurately assess the value of your case, you will be better prepared to navigate the complexities of your claim and protect yourself in the future.

What is a Full and Final Settlement?

A full and final settlement is an agreement you reach with your insurance provider after a motor vehicle accident. This agreement is a specified amount of money, mutually agreed upon to cover all claims for benefits – past, present, and future – that arise from the accident, as against the accident benefits insurer. These claims can encompass a variety of accident benefits from medical and rehabilitation, attendant care, housekeeping (if your injuries have been deemed Catastrophic or if optional benefits have been purchased under the policy), income replacement benefits, non-earner benefits, or caregiver benefits.

Generally, the settlement is given to you, the claimant, as a lump-sum payment and requires consent from both you and the insurer. The primary purpose of this arrangement is to provide you with closure and support while also limiting the future financial risk for your insurance provider.

Why You Should Not Agree to a Full and Final Settlement

While it may initially appear beneficial to agree to a full and final settlement of your claim with your insurance provider, it is crucial to consider the long-term implications of such a decision. When you find yourself at a LAT hearing and are offered a settlement, for instance, the future impact of your injuries might be unclear. In such a state of uncertainty, signing off on a full and final settlement implies accepting a definite sum to support your injury, eliminating any chance for further assistance down the line.

Additionally, the severity of your injuries can often be underestimated. In most cases, the full extent of damage from an accident, including the treatment you may need, such as surgery, attendant care, income replacement and other support, can take several months or even years to materialize. There is also the possibility of complications during recovery, which would require additional financial aid. It is important to envision potential future scenarios, so consider the following before agreeing to a settlement:

Will you have a permanent disability in the future?

Will you be able to perform your job effectively after your settlement?

Have you had surgery, or will you need it in the future because of your injury? If so, what are the potential risks of the surgery?

Will you need to see a therapist to deal with the mental impact and events of the accident?

What rehabilitation costs may arise in the future?

A full settlement also limits your right to pursue a determination of catastrophic impairment. This opportunity is forfeited once you’ve settled your entire accident benefits claim with your insurance provider.

Lastly, remember that while dealing with the LAT, you may find your insurer offering a full settlement for your claim even though your appeal pertains to only a portion of the claim, such as medical rehabilitation benefits or income replacement benefits. Be wary of such instances and remember, it’s crucial to think long-term when it comes to settling your claim. While a full and final settlement of your entire claim may seem appealing in the short-term, especially if you are in desperate need of treatment and/or financial support, doing so may be detrimental to your long-term health and finances if you have not considered the questions above.