Correct, if you reach a settlement with the guy's insurance company prior to filing suit the terms of the settlement will preclude you from filing a lawsuit against him. And if you settle after the lawsuit then the the settlement will end that lawsuit. Settlement is by far the most common resolution of these sorts of claims. If you can get a good settlement prior to filing the lawsuit, great. Sometimes though you need to file the lawsuit to prod the insurance company to come up with a worthwhile offer.

