Los Angeles Claims Adjuster Property and Causality Practice Exam

What type of settlement is achieved when a claimant signs a release relinquishing the right to sue?

1. Structured Settlement

2. Full Release Settlement

3. Scheduled Payment Release

4. Open-Ended Release

The correct answer is: Full Release Settlement

A Full Release Settlement occurs when the claimant signs a release agreement that relinquishes their right to pursue further legal action against the other party involved in the claim. This type of settlement typically means that the claimant accepts a specific amount of compensation for their loss or injury and, in return, agrees not to seek any additional damages in the future. By signing this release, the claimant acknowledges that they are fully compensated for their claim and are legally barred from reopening the case or bringing new claims related to the same incident. Structured Settlements, on the other hand, involve payments made over time instead of a lump-sum payment and are often used in personal injury cases where plaintiffs are given the option to receive compensation through an annuity or other financial vehicle. Scheduled Payment Release refers to a situation where payments are scheduled based on specific timelines or conditions, rather than a one-time full payment. Open-Ended Release implies that the parties retain the ability to pursue further claims or legal actions, which differs fundamentally from the concept of a Full Release Settlement where all rights to future claims are waived.