What Is The Difference Between First-Party And Third-Party Insurance?

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Many of our clients want to know what is the difference between first-party and third-party insurance. Confusion about the two is understandable. Knowing the difference between first-party insurance and third-party insurance claims may be helpful in planning your next steps after an accident. 

First-party claims are through your insurance, and you cover the expenses. Third-party claims are expenses covered by someone else. Since third-party claims often involve proving fault, they are also known as liability claims. It is not unheard of to submit both types of claims during an investigation. Keep reading to learn more about the difference between first-party and third-party insurance

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Understanding the complicated first-party and third-party insurance process can be difficult. If you are trying to figure out what steps to take after an incident, you owe it to yourself to contact a skilled insurance attorney. Farah & Farah are the leading insurance attorneys in Florida and Georgia. Get in touch with Farah & Farah now for your free, no-obligation consultation

What Is A First-Party Claim?

A first-party insurance claim is between the first-party policyholder and a second-party insurance provider. You usually file a first-party insurance claim with your insurance company after an incident.

Examples of first-party claims include:

At its core, insurance is a contract between you and your provider. When you file a claim, the insurance company should honor your agreement. If the insurance company fails to follow the contract’s rules, they may be acting in bad faith. Bad faith actions can be subject to legal repercussions.  

What is A Third-Party Claim?

Third-party claims involve three parties; the insured first-party, the second party insurance company, and the third party (another individual). Third-party insurance claims involve someone who is not a policyholder or an insurance company. The insured person has a contract with their insurer to look out for their best interests. Third-party claims are there to protect an insured party against liability for damages or loss. 

Common types of third-party claims include 

Auto Workshop Mechanic Inspecting Damage To Car And Filling In Repair Estimate

The main difference between these two claim types is that the person files a claim against the insured party in a third-party insurance claim. Their claim is with the insurance company and not directly against the negligent party.

Bad Faith in First Party and Third-Party Insurance Claims

It is a sad fact that bad faith insurers influence first-party and third-party insurance claims. First-party bad faith involves insurers who refuse to investigate a claim or flat out deny a claim without proper scrutiny. Bad faith first-party actions can include insufficient processing, inadequate investigation, delayed payment, and unreasonable claim denial. 

Third-party bad faith includes insurers who fail to meet the policy limits for their claims, misrepresentation of their claims, altering paperwork without your consent, denying legit claims, or failing to act in a timely manner. 

Someone needs to hold bad faith insurance companies accountable. However, it can be an uphill battle without proper representation. Hiring a lawyer as soon as possible can help clear your path to justice. 

How Our Insurance Dispute Attorneys Can Help

Navigating the complicated first-party and third-party insurance process alone is difficult. Without someone who understands the ins-and-out of the law, you may end up settling for less than you deserve. An  insurance dispute attorney can look out for your best interests in your fight for justice. Trusting your case with an attorney will free you up to focus on getting your life back on track and recovering. 

You don’t have to take it lying down. For over 40 years, Farah & Farah has defended people against the greedy hands of the insurance companies. We have helped many people across Florida and Georgia get the justice they deserve. When an insurance company tries to swindle you out of a fair settlement, contact an insurance dispute attorney as soon as possible. Contact our experts now for your free, no-obligation consultation

Eddie Farah and Chuck Farah meeting with attorney Rick Staggard