What Is The Difference Between First and Third-Party Insurance Claims?

When a car accident happens that results in your injury, you should file a claim with either your insurance company or the insurance company of the responsible driver. Doing this gives you access to potential compensation for damages, including physical, financial, and emotional damages. Read on to learn more about the insurance claims process, specifically the difference between first and third-party claims, as well as some tips on determining your claim’s value and what to do when facing a denial.

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First vs. Third-Party Claims

Insurance claims fall into two categories:

  1. First Party. When you file a claim with your own insurance company, you have filed a first-party claim. A second party, in this case your provider, then pays you compensation for damages lost. You can only file this claim when you receive injuries caused by the second party or a separate third party.
  2. Third Party. Filing a third-party claim happens when you file for compensation from someone else’s provider, when that person has full or partial liability for your injury and other damages. This can be driver, a pedestrian, or a land owner. Most insurance providers include third-party coverage in their policies to provide compensation for these injuries. Examples include:
    • As a passenger in someone else’s car, you sustained injuries when that person caused an accident.
    • Another driver strikes you while you are driving your own car. (Note: this only happens when you are not at fault and the accident happens in a state without no-fault insurance.)
    • You sustained injuries in an accident while driving a company car.

In these cases, the type of claim you file depends on who bears responsibility for your injuries. Remember, more than one party could share responsibility. The type of claim also depends on the type of accident and what insurance you have.

Insurance Claims Process

You must file all injury reports following an accident within 24 hours of the injury, regardless of who was responsible. Be prepared to provide information about the accident, including information about the types of injuries you sustained.

The company will start an investigation, during which you must provide any evidence you obtained from the scene of the accident. This can include photos, eyewitness accounts with names and contact information of each witness, and a written account of the incident.

Be prepared to submit to an independent medical examination with a doctor chosen by the insurance company. When this happens, it is important you know your legal rights regarding the examination and what medical records the doctor releases to the investigating body. You may request your provider give a report for the investigation instead, and you should ask to see it first to make sure medical information not pertinent to the case is excluded.

Once finished with their investigation, the insurance company will issue you a settlement check or deny your claim. A company may issue a denial for many reasons, including late filing, refusing an examination, or because your injury doesn’t qualify. At this point, you can appeal the decision if the amount offered is low or if you received a denial. Such an appeal will likely require more questioning and a more thorough medical examination.