- First-party insurance is when the insured party (called the first party) is paid by the insurer (called the second party) in the event of accident, injury or loss. First-party claims therefore are claims where the insured is simply forwarding information of an accident, injury or loss to the insurance company with the expectation that compensation is forthcoming.
- A first-party claim has to meet the qualifications in the insurance contract in order to be valid. For instance, if you bought insurance that covers damages to your car up to $10,000 in the case of an accident, you need to make sure there are no other loopholes that apply to the situation. If the insurance states that they are exempt in the case of criminal wrongdoing, such as drunk driving, then you may not be able to make a claim at all.
- A first-party claim is different from a third-party claim. Third-party insurance would be if you were involved in a traffic accident with another car, the other car and the driver would be considered the third-party. Third-party insurance will pay the other person for damages, and the amount and claim is separate from your first-party claim. The first-party claim is when the insurance company pays for damages that you sustained.
- If there is a problem with getting an insurance company to pay what is owed, then the matter can be taken to civil court in the case of a first-party claim. You can either settle with the insurance company out of court, or you can go through the entire process and let the court decide if you have a valid, first-party claim according to the contract that you signed.
