If you’ve been involved in an accident or have suffered some form of property damage, you will have to deal with insurance companies at some point. The type of claim you will need to file depends on the circumstances surrounding your case. Understanding the differences between first-party and third-party insurance claims is essential to making a strong claim and ensuring that the claims process proceeds as smoothly as possible.
First-party insurance claims
When you purchase an insurance policy to cover damages and losses to your property, this is considered first-party coverage. As such, a first-party insurance claim happens when you make a claim directly with your insurance provider. You must make any claims in good faith. Your insurance company is also required to practice good faith in the handling of your claim.
Third-party insurance claims
A third-party insurance claim is filed by one party against the other party’s insurance provider. Most third-party claims involve liability issues. For example, if a person is injured on your property, they may file a claim with your insurance carrier.
Differences in compensation
Compensation for first-party claims is limited to the terms of the policy. This is not true for third-party claims. A person who files a third-party claim may seek compensation for damages that a first-party would not be entitled to, including compensation for lost wages and pain and suffering. Whether you’re making a claim with your insurance company or whether another party is seeking compensation, you should work closely with a legal professional to ensure your interests remain protected throughout this process.