Glossary

Release of liability

A document an injured person signs to accept a settlement and give up further claims against the at-fault party for that accident.

Also called: liability release, settlement release, general release

A release of liability is the agreement that closes a claim. When an insurer settles with someone who was hurt or whose property was damaged, it pays only after that person signs a release: in exchange for the money, they give up the right to seek more from the insured, and usually the insurer, for that accident.

Releases are typically final. Example: you accept $6,000 for neck injuries two weeks after a crash and sign a release. If you later need surgery costing $30,000, you generally cannot reopen the claim against the at-fault driver (hypothetical figures). Courts set releases aside only in narrow circumstances, such as fraud. Read the scope carefully: some releases cover every claim, injury and property, against everyone, while others are limited to vehicle damage. A property-damage-only release should not waive injury claims.

Before signing a release on a third-party claim, make sure you know the full extent of your injuries, which may mean waiting until treatment ends, while staying within the statute of limitations. Check whether health insurers or medical providers have liens on the settlement. If you may need underinsured motorist benefits, tell your own insurer before releasing the other driver, because settling without its consent can jeopardize that claim. For serious injuries, consider a licensed attorney. See working with an insurance adjuster.

Last reviewed October 4, 2026

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Related terms

Demand letter A written request to an at-fault driver's insurer that sets out your injuries and losses and asks for a specific settlement amount. Policy limits demand An injured person's offer to settle for the at-fault driver's full liability limit by a deadline; mishandling it can expose the insurer to bad faith. Third-party claim A claim you make against another driver's insurance for damage or injuries that driver caused, rather than against your own policy. Statute of limitations The legal deadline for filing a lawsuit after a crash, set by each state and often different for injury and property damage claims. Claims adjuster The insurance company employee or contractor who investigates a claim, decides what the policy covers and sets how much is paid. Subrogation An insurer's right, after paying your claim, to recover that money from the party who caused the loss, often getting your deductible back too.

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