What Is the Difference Between a Third-Party and a First-Party Insurance Claim?
Whether you’re pursuing compensation for an injury or seeking guidance on how to best protect your rights, knowing how first-party and third-party claims work will help guide you through the process.
Serving Amarillo, Texas, Tormey & McConnell is here to help. We’ll explain the distinctions between these two types of claims, how they affect your ability to recover damages, and which type may be relevant to your situation.
First-Party Insurance Claims
A first-party insurance claim involves a situation where the insured individual or entity files a claim directly with their own insurance company. As the policyholder, you’re the “first party,” and the insurer is the “second party.” This type of claim is primarily related to claims made against your own policy.
In the context of personal injury law, if you have an auto insurance policy that includes personal injury protection (PIP), you can file a first-party claim with your own insurance provider after an accident. It doesn’t matter whether the accident was your fault or someone else’s; as long as your policy covers the specific type of injury you sustained, you work with your own insurer.
Benefits of First-Party Claims
The primary benefit of filing a first-party claim is the speed of the process. Unlike third-party claims, where you may have to wait for negotiations or legal battles between the insurance companies involved, first-party claims tend to move faster. Your insurer is contractually obligated to pay out your claim if the incident is covered under your policy.
Additionally, in a first-party claim, you may not have to deal with the added stress of negotiating with another party’s insurance company. This can reduce the burden of managing your claim and provide more direct access to the compensation you need to cover medical expenses, lost wages, or other damages related to your personal injury.
However, it’s important to note that while first-party claims can be beneficial, they’re still subject to policy limits. For example, if you’ve sustained significant injuries that exceed the coverage of your PIP or medical payment policy, you may need to explore other avenues, such as a third-party claim, to recover additional compensation.
Third-Party Insurance Claims
A third-party insurance claim arises when you’re seeking compensation from the at-fault party’s insurance company. In these claims, the “third party” refers to the individual or entity responsible for causing the accident or injury, and their insurance company becomes the party from which you seek compensation.
For instance, if you’re injured in a car accident caused by another driver, you would typically file a third-party claim against the other driver’s auto insurance company. In this type of claim, you, as the injured party, are the “third party” in relation to the at-fault driver’s insurer, which is the “second party.”
In the context of personal injury law, third-party claims are commonly filed in cases involving accidents, medical malpractice, product liability, and other incidents caused by the negligence or intentional actions of another party.
It’s important to understand that third-party claims can be more intricate than first-party claims. These claims may involve negotiations between your attorney and the at-fault party’s insurer, and sometimes even litigation, if an agreeable settlement can’t be reached.
Key Differences Between First-Party and Third-Party Claims
The most fundamental difference between first-party and third-party claims lies in the party from whom the compensation is sought. In a first-party claim, the claim is made against your own insurer, while in a third-party claim, the claim is made against the insurer of the individual or entity responsible for the injury.
Additionally, third-party claims are often more complicated because they involve establishing fault. In personal injury law, liability is key to determining who should be held responsible for the injuries sustained. The insurer of the responsible party may deny liability or attempt to minimize the damages, which may require legal intervention.
Another important difference is the type of coverage that applies to each claim. First-party claims may be limited by the types of coverage you have under your own policy. For example, if your auto insurance policy only includes basic PIP coverage, you may not be able to recover the full cost of medical bills or lost wages without filing a third-party claim.
When to Pursue a First-Party Claim
In personal injury law, pursuing a first-party claim may be the first step if the injury is covered under your own insurance policy. If you’ve been in a car accident and have PIP or medical payments coverage, you should consider filing a first-party claim as soon as possible.
First-party claims are typically faster and easier to work through compared to third-party claims, so it’s advisable to start here if you can. For instance, if you’re injured in a car accident, your own PIP coverage could help cover medical expenses, regardless of who was at fault for the accident.
However, if your injury or damages exceed the limits of your policy or if the at-fault party’s actions were especially negligent, you may need to file a third-party claim to recover the full justice you deserve. This is where understanding the nuances of personal injury law becomes crucial.
When to Pursue a Third-Party Claim
If you’ve suffered significant injuries or damages in an accident caused by someone else’s negligence, a third-party claim may be necessary to secure full compensation.
Third-party claims are particularly relevant in situations where the at-fault party’s insurance coverage exceeds your own policy limits or if your own insurance policy doesn’t cover the specific type of damage or injury you’ve sustained.
In personal injury law, third-party claims often come into play in scenarios involving car accidents, slip and fall incidents, workplace accidents, and more. If the responsible party’s insurer offers a low settlement or refuses to accept liability, it may be necessary to proceed with legal action to make sure you receive a fair and just outcome.
Moreover, third-party claims allow you to seek compensation for a wider range of damages, including pain and suffering, emotional distress, and loss of future earning capacity—damages that may not be covered under a first-party claim.
What Should You Do After an Accident?
Knowing the steps to take after an accident is crucial for making sure that you’re properly protected and that you can effectively file either a first-party or third-party insurance claim. Here are the steps we recommend following after an accident:
Seek medical attention immediately: Regardless of how minor your injuries may seem, it’s important to visit a medical professional right after the incident. Even small injuries can escalate, and a medical record will serve as vital evidence for your claim.
Document the incident: Take photos of the accident scene, any visible injuries, and property damage. Be sure to obtain the contact details of any witnesses and document the circumstances surrounding the incident.
Notify Your insurance company: Whether you’re filing a first-party or third-party claim, notify your insurance company as soon as possible. Provide them with all relevant details about the accident and your injuries.
Consult with an attorney: Contact an experienced personal injury attorney to discuss your options. Whether you’re filing a first-party or third-party claim, having legal representation can help make sure that your rights are protected and that you receive fair compensation.
File the appropriate claim: Depending on the details of your case, your attorney will help you decide whether to pursue a first-party claim or a third-party claim. If you need to file a third-party claim, your attorney will guide you through the process of establishing fault and negotiating with the responsible party’s insurance company.
Get in Touch
By knowing which type of claim applies to your situation, you can make more informed decisions about your path to compensation. We serve clients in Canyon, Dumas, Pampa, Hereford, Childress, and Borger, Texas. Contact an experienced personal injury attorney from Tormey & McConnell today.