What is the difference between a first-party and a third-party claim?

First and third-party claims are different means to collect compensation after a personal injury incident. A first-party claim is when you file an insurance claim against your own insurance company. A third-party claim is when you file an insurance claim against another party.

You may not realize that there are various reasons why a first-party or third-party claim may be your best course of action.

In the event of a car accident in a no-fault state, you should have first-party benefits, usually known as personal injury protection (PIP). It’s a legal requirement to carry PIP in no-fault states. This is a first-party claim because you took out the insurance policy and paid for it to cover medical expenses and lost wages. Even if you’re in an at-fault state, you may need to file a first-party claim if the other party was uninsured or underinsured.

In the event of a house fire, theft, or damage from the elements, you’ll most likely have homeowners insurance. In this case, you’ll be filing a first-party claim. Again, it’s a first-party claim because you are the one that took out the insurance policy and paid the premiums.

When a third-party insurance claim is made, there are three parties: you, another party, and their insurance company. Therefore, you are making a third-party claim because you are not the insurance holder. The most common third-party claim concerns liability. For example, suppose you’re injured on someone’s property because they were negligent concerning hazardous conditions on the property. In that case, you would be making a claim against the property owner’s insurance company to pay for your damages. In essence, you don’t have a contract with the insurance company. Rather, the property owner is the one who holds the contract.

If you’re asking what the difference is between a first-party and a third-party claim, you may not be sure which type of claim to submit for compensation. In the case of motor vehicle accidents, it will largely depend on state laws concerning fault. In at-fault states, the party who is responsible for the accident is liable. In no-fault states, your PIP coverage pays for medical expenses and lost wages. However, you can still file a claim against an at-fault party for property damage.

Outside of car accidents, generally, the at-fault party and their insurance provider will be responsible for compensating you for injuries and losses. However, if the fault is in question, you may be best served by filing both first-and third-party claims. At Morgan and Morgan, we recommend a consultation with one of our lawyers whenever you’re in doubt.

An insurance claim begins once you notify an insurance company of injuries or losses. You’ll be assigned a claim number, and insurance representatives will reach out to you to gather information about the claim. At this point, you should be very careful about what you say, even if you’re talking to your own insurance company.

Insurance representatives are tasked to protect their company’s bottom line, particularly when a substantial amount is in question. We highly recommend securing our legal counsel to negotiate on your behalf if you have sustained severe injuries or suffered considerable losses.

You may not understand how much your claim is really worth, and the insurance companies aren’t going to help you figure it out. This is especially true when there is a high degree of trauma and loss.

When we take on a case, we work diligently to protect our client’s rights and shield them from aggressive insurance adjusters. At the same time, we build a winning legal strategy. Our methods may include:

• Conducting a thorough independent investigation
• Interviewing witnesses
• Research into the history of the at-fault party
• Using the legal doctrine of negligence to prove fault and liability
• Reviewing police reports
• Compiling relevant documentation such as medical records, pay stubs, contracts, and invoices
• Recruiting the help of expert witnesses, scientists, and other specialists

Another vital aspect to consider when asking about the difference between a first-party and a third-party claim is your state’s statute of limitations. Depending on the type of personal injury you’ve experienced, state laws put a limit on the amount of time an individual has to initiate a claim against another party. Some deadlines are very short. That’s why it’s critical to get in touch with us as soon as you can. Even if you’ve already researched your state’s statute of limitation for your type of personal injury, there may be exceptions to the rule. We urge you to contact us today for a free and confidential case evaluation. You won't be obligated to pay a fee until we win compensation.