What is a “close-out” settlement? Insurance companies are potentially “on the hook” (liable) to pay No-Fault benefits for as long as you are disabled and in need of medical care and up to the No-Fault limits which is usually $20,000 in medical coverage and $20,000 in non-medical benefits (wage loss and replacement services (homemaker). This liability can be for life!
Accordingly, No-Fault insurance companies will sometimes offer the insured a “close-out” settlement. This means that the insurance company will offer some sum of money to the insured in return for the insured’s agreement to release the company from the responsibility to pay any future claims. This allows the insurance company to “close their books” on this claim.
The insured, on the other hand, benefits by receiving money for the “close-out.” The “down-side,” or disadvantage, is that the insured is giving up the right to make a claim against the insurance company for more benefits later. It should be remembered that, in most cases, the insured may claim any future medical expenses against any other health and accident insurance coverage that is available.
In the event that you have been offered a close-out settlement, your attorney at Schmidt-Salita Law Team can help you to decide what is in your best interests.