There is a common scenario that plays out following an auto accident. First, the injured driver sends a demand letter to the negligent driver’s insurance company, offering to settle for the limits of the latter’s policy. Next, the insurance company either accepts the offer unconditionally–usually by sending a check–or makes a counter-offer. A counter-offer constitutes a rejection of the original offer, so there is no agreement. But if the insurer does send the check, that is often enough to create a binding settlement, which the insurer and its insured may seek to enforce in court.
Claxton v. Adams
What if the insurance company sends a check, but it cannot be cashed right away? Is there still a binding settlement? Not according to a recent decision from the Georgia Court of Appeals.