If you’ve been hurt in a car accident in Ontario, you may be receiving Statutory Accident Benefits (“SABS”). These are benefits that help you pay for things like treatment, lost income, and support while you recover. You can receive these benefits even if you are at fault for the accident.
At some point, you might be asked by the insurer if you’d like to settle your claim. This means you agree to take a lump sum of money now instead of continuing to get benefits in the future.
While there can be advantages to doing so, there are several important considerations to keep in mind before agreeing to settle your claim.
When can you settle an accident benefits claim?
You can’t settle right away after the accident.
In Ontario, you must wait at least one year from the date of the accident before you’re allowed to settle most parts of your SABS claim.
This waiting period is meant to protect you. It is difficult to know how your injuries will heal, or if they will, right after the accident. You might think you’re getting better, only to have symptoms come back months later. Waiting gives you time to understand your needs better before signing anything final.
What happens when you settle?
When you settle, you and your insurance company sign papers (a “Settlement Disclosure Notice” and a release) that say:
- You’ll get a lump sum of money.
- In exchange, you give up your right to get certain benefits in the future (depending on what the settlement covers).
The Settlement Disclosure Notice is a mandated form in which your rights are outlined, as well as the breakdown of your settlement. The release is a document that formally ends your entitlement to some or all of your benefits, depending on the terms of the settlement agreement.
This is a big decision. Once you settle, you usually can’t go back. This is true even if your injuries get worse. That is why it’s so important to understand what you’re giving up before you agree.
What happens if you don’t settle?
If you do not settle your claim, your claim remains open and your entitlement to benefits will continue. However, that does not necessarily mean you will receive those benefits. The insurance company may deny you payment or your benefits could expire. If you do not settle your claim, your benefits expire five years after the accident unless you have catastrophic injuries.
Can you cancel a settlement?
Yes, but only for a short time. This is called rescinding the settlement.
Pursuant to a Regulation under the Insurance Act, an insured person may rescind the settlement within two business days after the day the insured person signs the Settlement Disclosure Notice or the release, whichever is later. The two-day window does not include weekends or holidays.
If you change your mind within those two days, you will need to give written notice to the insurance company to cancel the settlement.
If you miss the two-day window, the settlement is almost certainly irrevocable. Only if the insurance company did not provide you with the required documentation and information can you revoke the settlement at a later date.
So think carefully, ask questions, and make sure you understand everything before signing.
Why legal advice helps
If your insurance company offers you a settlement, it is easy to feel overwhelmed or unsure about what’s fair. A lawyer can help you understand what the insurance company is offering, whether the amount is fair, and what you’d be giving up. In most cases, a lawyer can negotiate a higher settlement amount for you. Contact our personal injury department for a free consultation at 877-672-212.