If you sustained an injury, you might be able to pursue a personal injury claim. However, what many do not realize is that they have two options:
- Filing a first-party insurance claim; or
- Filing a third-party insurance claim.
The type of insurance claim that you must file in order to obtain compensation depends on your circumstances and the facts surrounding your car crash, slip and fall accident, bicycle collision, or other accident. In fact, under certain circumstances, you can pursue both a first-party and third-party claim. It is vital to understand the difference between first-party and third-party insurance claims prior to contacting your insurer and filling out any paperwork.
When You Need to File a First-Party Insurance Claim
First-party insurance is the insurance policy that you purchased to cover your bodily injury and property damage. The most common types of first-party insurance are:
- Health Insurance
- Personal Injury Protection (PIP)
- Uninsured/Underinsured Motorist Coverage (UIM)
When submitting a first-party insurance claim, you are making a claim directly against your own insurer. After the claim has been made, the insurance company will determine your eligibility to recover damages based on the terms of your insurance policy. For example, first-party claims are often filed by victims of auto accidents caused by a hit-and-run motorist or when the other party is uninsured or underinsured. If your insurer denies your claim in violation of the terms of your policy, you may be able to sue the company for breaching the contract and violating the terms of the agreement.
When You Need to File a Third-Party Insurance Claim
A third-party insurance claim covers any damages and losses suffered by another person as a result of the policyholder’s fault or negligence. Thus, you need to purchase third-party insurance to be able to pay for any damages sustained by another person. Common types of third-party insurance are:
- Auto Liability Insurance
- Homeowner’s Coverage
- Commercial Motor Vehicle Liability Coverage
- Product Liability Insurance
When it comes to pursuing a third-party insurance claim, the first party is the policyholder, the second party is the insurer, and the third party is the person who suffered harm due to the policyholder’s fault. A third-party claim needs to be filed by the injured person against the negligent party’s insurer. For example, if you are a motorcyclist who was injured in a motorcycle crash due to a motorist’s fault, you need to file a third-party insurance claim against the car driver’s insurance company.
Compensation via First-Party vs. Third-Party Insurance Claim
Another difference between first-party and third-party insurance claims is the amount of compensation that can be recovered. While your recoverable compensation is limited to the terms of your policy when bringing a first-party insurance claim, the same cannot be said about recovering damages through a third-party claim because the third party has no contractual obligations. For example, if your own auto insurance policy does not compensate for lost wages, you may be able to get reimbursed for the loss of income through a third-party claim. Contact our personal injury lawyer at Roberts Law Office if you are not sure whether you should file a first-party or third-party insurance claim following your accident. Our attorney will investigate your particular situation and advise you on your legal options. Call at (859) 231-0202 for a case review.