Author: Attorney Daniel Zdravkov

Has an insurer offered you a car accident settlement in Bulgaria? Before accepting, check more than the amount. Establish which losses are being settled, which claims remain outside the agreement and when payment will be made. The words “full and final compensation” can have significant consequences.

The short answer: settlement can be a useful way to resolve a claim voluntarily, but it is more than a receipt. You do not have to accept the proposed terms for the insurer’s duty to assess the claim to arise. Bulgaria’s Financial Supervision Commission states that a settlement agreement is not a mandatory condition for payment under compulsory motor third-party liability insurance.

What is an insurance settlement agreement?

Where the parties resolve an existing or possible dispute by making mutual concessions, the document may be a settlement contract under Article 365 of the Bulgarian Obligations and Contracts Act. Its substance and the parties’ actual intention matter more than a heading such as “agreement”, “declaration” or “receipt”.

Distinguish three situations: the insurer assesses and pays an amount under the claim; the parties agree a partial settlement covering specified losses only; or they conclude a final settlement for an expressly defined scope. The consequences differ.

This article mainly concerns an injured person’s claim against the responsible driver’s motor third-party liability insurer. Claims under your own comprehensive motor insurance require separate review of the policy and its terms. For wider assistance, see our insurance law advice in Bulgaria.

Why does “full and final compensation” matter?

A valid settlement binds the parties in respect of the losses it covers. Do not assume that, after signing, you can always obtain more compensation for the same settled losses simply because you later consider the amount too low.

In Interpretative Decision No. 1/2016 of 30 January 2017, the Bulgarian Supreme Court of Cassation held that an injured person cannot recover from the person responsible an amount above the insurer’s payment under a settlement in which the injured person expressly stated they were fully compensated for the relevant harm. Do not assume that a final settlement can automatically be bypassed by pursuing the driver instead.

A review should address the type of harm, the agreement’s scope and validity, and the payment actually made. A clause does not necessarily have an identical effect in every situation.

Before signing: eight questions to ask

1. Which accident and claim does the document concern? Check the accident date, parties, claim number and the capacity in which you are signing. Do not leave blank fields to be completed later.
2. Which losses are being settled? Separate pain and suffering from medical expenses, lost income and vehicle damage. A broad reference to “all pecuniary and non-pecuniary losses” may extend much further than the oral discussion.
3. Has treatment finished? Check the prognosis, planned operations, rehabilitation, care needs and possible lasting consequences. Medical assessment matters when evaluating the offer.
4. How was the amount calculated? Request a breakdown and an explanation of any reduction, including alleged contributory fault. There is no single amount suitable for every apparently similar injury.
5. What does the financial settlement include? Clarify the principal amount, interest, previous payments, costs and any deductions. Make sure a payment is not counted twice.
6. When, to whom and on what conditions will payment be made? Check the due date, bank account and how payment relates to any release from liability. Do not acknowledge receiving money that has not been paid.
7. Which future claims are being given up? Review finality clauses, future expenses, unknown consequences and references to the insured driver or other persons. Any losses intended to remain outside the settlement should be clearly identified.
8. Is a court case already pending? Check whether you are being asked to withdraw or waive a claim and how legal costs are allocated. Waiving a court claim has separate procedural consequences; it is not the same as simply receiving money.

Can you receive payment without a final settlement?

Yes. Payment of an amount assessed by the insurer and conclusion of a final settlement are different acts. A bank transfer alone is not equivalent to signing a final settlement contract; all accompanying documents and statements must be examined.

If you disagree with the assessed amount, you can request its factual and legal justification. Under Article 108(6) of the Insurance Code, the insurer must provide a written explanation within seven days of a complaint about the amount. See the Financial Supervision Commission’s motor liability claims guide (in Bulgarian).

An expressly partial settlement may also be discussed. If other claims are to be preserved, the text should identify exactly which losses are covered and which remain outside the agreement. An oral assurance that “we will pay the rest later” is no substitute for clear terms.

What if new injuries or deterioration appear later?

Newly arising losses, or losses outside the settlement’s subject matter, may require separate assessment. Bulgarian case law also addresses subsequent deterioration, known in Bulgarian law as ekstses, which can raise a question of additional compensation. This does not create an automatic right to a further payment whenever symptoms continue.

The medical development, causal link to the accident and scope of the losses already settled must be established. The distinction between settled losses and new or uncovered harm is discussed in Supreme Court of Cassation practice published in its October 2023 bulletin. Final settlement therefore needs particularly careful review where treatment is ongoing.

What if the offer is low or you have already signed?

Before signing, request the full draft, a written explanation and a reasonable opportunity to review it. Gather missing evidence and assess whether to make a reasoned counteroffer. Litigation may be an option where the relevant requirements are met, but it calls for an assessment of evidence, costs and deadlines.

If you have already signed, retain the settlement, powers of attorney and proof of payment. Do not assume either that every signed agreement is beyond challenge or that a low amount alone invalidates it. Available remedies depend on specific legal grounds and facts. If payment is not made, the contractual consequences and appropriate enforcement or other remedy also need to be checked.

Keep applicable limitation and procedural deadlines under review during negotiations. For a related practical guide, see denied or underpaid insurance claims in Bulgaria.

Frequently asked questions

Must I sign an agreement to be paid?

No. The Financial Supervision Commission says settlement is not a mandatory condition for payment under motor third-party liability insurance. Check whether the requested document is a settlement or serves another purpose.

Does receiving a transfer prevent me from disputing the amount?

That conclusion cannot be drawn from the transfer alone. A valid final settlement and its scope matter. Any payment already received must be accounted for in a later claim.

Can I claim the balance from the driver after final settlement?

Do not treat this as an automatic option. The interpretative decision cited above excludes additional recovery from the person responsible for the same harm where the decision’s conditions are satisfied.

Should I reject every settlement proposal?

No. A properly prepared voluntary settlement may save time and costs. The decision should reflect the amount, evidence, scope of the agreement and realistic alternatives.

What should you prepare for a consultation?

• The settlement draft and all correspondence with the insurer.
• The claim, claim number, insurer’s decision and payment records.
• Accident documents, medical records, prognosis and evidence of expenses and lost income.
• Powers of attorney and documents from any pending court proceedings.

Zdravkov Law Firm assists with reviewing settlement offers, assessing the scope of claims and representation before insurers and courts. For a review before signing, contact our insurance lawyers in Sofia, Bulgaria on +359 886 722 772 or office@zdravkov-legal.com.

This article provides general information on Bulgarian law and does not replace individual review of your documents. Sources: Article 365 and following of the Obligations and Contracts Act, the Bulgarian Insurance Code, the FSC’s guidance and the court practice linked above. Sources checked: 2 November 2026.