What does the Settlement Mean?

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What does the Settlement Mean?
As public adjusters, we often have clients
concerned with the term settlement during their
insurance claims. Throughout the claims process,
insurance companies should send a notice of
payment letter any time a payment is issued.
Often these letters will either say Settlement
Notice at the top of the page or have a line
within that has a settlement amount listed.
The most common misconception that insureds have
is that the letter and payment mean that the
insurance claim is settled and nothing further
can happen. This is not true.
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Estimates are almost always subject to change as
additional repairs may be needed or items were
not included that should have been. When there
are additional repairs needed, this is called a
supplement. The other common misconception is
that by cashing the payment, you agree to settle
the claim. Again, this is not true. The
insurance company has made a payment that they
agree to and have settled on the scope of work
and the amount of payment at that time. The
payment is an undisputed amount meaning both you
and the insurance company agree you are owed at
LEAST that much. In these situations, the term
settlement is essentially used to reference the
speci?c payment that is being issued. The same
will occur when there is a revised estimate or
inventory. A true settlement on a claim where
the claim is closed will most of the time have
an attorney involved. Attorneys get involved
with insurance claims because of bad faith. At
that point, the attorney will negotiate a
settlement amount with the insurance company to
?nalize the claim. That being said, if an
insurance company requests you to sign a "full
release of claim" for payment, that would be a
release, and you should always contact an
attorney for advice. If you receive a payment
from the insurance company and you are concerned
that you will not be able to repair your home
with that amount, c all your public adjuster.
They will work for you with the insurance
company to ensure you are paid properly and that
any payment and settlement letter is accurate.