After being hurt in a personal injury accident, there are several steps you need to take to initiate the process of recovering compensation. One of the primary steps involves working with your insurance company. However, you may not realize that there may be more than one insurance company to consider.
You may need to file a claim against your own insurance company. You may also need to file a claim against someone else’s insurance company. Your personal injury attorney can help you determine which company you need to file a claim with.
What Are First-Party and Third-Party Insurance Claims?
First-party and third-party insurance claims are different ways to make insurance claims. A first-party insurance claim is a claim you make directly against your own insurance. A third-party insurance claim occurs when you submit a claim to someone else’s insurance provider.
Many people don’t know that when you’re hurt in a personal injury accident, a first-party claim or a third-party claim may be appropriate. In some cases, you may need to submit both a first-party and a third-party claim. The difference between the first and third-party designation is whether your claim is through insurance that you get and pay for yourself or insurance that someone else purchases to cover their own liabilities.
What Is a First-Party Claim?
A first-party insurance claim occurs when you file a claim with your own insurance company after an accident or injury. You’re the one who takes out the insurance policy and pays the bill.
Then, you have an accident. You notify your insurance company of the accident, and you ask them to pay you fairly for your losses under the terms of the contract.
You might file a first-party insurance claim for any of the following types of insurance coverage:
- Uninsured motorist coverage
- Underinsured motorist coverage
- Medical bills under a Med Pay policy
- Collision and comprehensive coverage
- Rental coverage if you need a rental car while you wait for repairs
- Towing
What You Can Claim Depends on Your Contract
What you can claim depends on the terms of your contract. If you have coverage for a type of loss, you can submit your claim and ask the insurance company to pay you. They may pay you up to your policy limits for that type of damage.
What Is a Third-Party Claim?
A third-party insurance claim is a claim that you make against someone else’s insurance policy. A third-party claim is most likely to occur when you’re hurt because of someone else’s negligence, and they have insurance to cover that type of liability.
To make a third-party claim, you determine who their insurance provider is. You notify the insurance provider of the claim. If their insurance policy covers that type of loss, they may pay you up to the limits of the policy.
An Example of a Third-Party Claim
You’re stopped at an intersection. There are stop signs in all directions. It’s your right of way, so you proceed into the intersection. Another driver runs their stop sign and hits you.
You have vehicle damage, a broken arm, and whiplash. The other driver has an insurance policy that covers liability for physical injuries and property damage. You bring a claim for payment to their insurance provider. You’ve filed a third-party insurance claim.
How Do I Know Which Claim to Submit?
Usually, to decide where to file an insurance claim, you look at who’s at fault for the accident. In most auto accident cases and any type of personal injury claim, the person who causes the accident typically pays for the damages.
If the fault isn’t immediately apparent, you may need to bring a first-party claim and a third-party claim. Also, if you have the appropriate insurance coverage, you may bring a claim against your own insurance company if the other party is underinsured or uninsured.
What’s the Claims Process?
Whether you file a first-party claim or a third-party claim, the claim starts when you notify the insurance company of your losses. They assign a claim number, and they appoint someone to investigate called a claims adjuster. You need to tell the adjuster what your damages and losses are and how your losses occurred.
The investigator may ask you for more information. The adjuster makes a decision. They may agree to pay you what you’re asking for, they may pay you less, or they may deny your claim altogether. If you disagree with the adjuster’s decision, you may consider negotiating further, or you may file a formal claim in court.
Bad Faith in Third-Party Insurance Claims
One significant difference between first-party and third-party insurance claims in Nevada is that only first-party claims allow you to allege bad faith. An insured person can claim the insurance company is acting in bad faith when they refuse to pay a valid claim. If the insurance company refuses to pay a claim in bad faith, they may owe the insured person extra damages and penalties.
In Nevada, you can only allege bad faith if you’re bringing a first-party claim. Bad faith damages are not available in third-party insurance claims. In the Gunny v. Allstate Ins. Co. case, the Nevada Supreme Court said that bad faith allegations don’t apply to third-party insurance claims.
First-Party Claims and Subrogation
If you file a first-party claim, your insurance company may want the other party’s insurance company to pay them back if the other party is at fault for your personal injury.
That’s called insurance subrogation. If subrogation applies, your insurance company pays you, and the other party’s insurance company reimburses your insurance company.
How a Personal Injury Attorney Can Help
From deciding where to file your claim to helping you with the claims process, your attorney can ensure you take the right steps to bring your claim successfully. Your attorney can help you provide the information you need to give to the insurance company without making statements that can harm your case.
An experienced lawyer will help you fight back if the insurance company refuses to pay you fairly. You don’t need to go at it alone; your attorney will help you through every step of the process to ensure you get the maximum compensation possible.
