Mrs. Margaret Williams was a passenger in the car driven by her husband. They were rear-ended by a State Farm insured.
State Farm appeared to treat Mr. and Mrs. Williams nicely. It quickly settled with them for their property damage and issued a check in the exact amount of the estimate for repair to their car ($889.46). Unfortunately for Mrs. Williams, State Farm language put on the back of the check that the check was for full settlement of all claims, including bodily injuries, even though there had been no discussion of bodily injuries.
When Mrs. Williams made a claim for medical injuries, the lawyers for State Farm took the position that by cashing the property damage check, she had given up her claim for injuries to her body! The fact that the check was for the exact amount of the property damage and not a penny more did not bother State Farm.
Mrs. Williams had to hire a lawyer to straighten this out and State Farm took the appeal all the way to the Texas Supreme Court before she won the right to bring a lawsuit for her bodily injuries!
The lesson here is that one should not rely on the benevolence of an insurance company. You must be careful before cashing any check from any insurance company. I recommend you have a lawyer look at any settlement check from an insurance company before you cash it so you can avoid Mrs. Williams' experience.
Written by Donald Ray Burger, Attorney at Law
Last revised: January 23, 1997
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