Woman signing personal injury document

First-Party vs. Third-Party Personal Injury Claims: What’s the Difference?

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When you’re considering the difference between a first-party injury claim and a third-party injury claim, a central question is being addressed — “Who is responsible for your injuries?” 

You might know that a person is responsible for paying you damages if they act carelessly and thereby cause injury to you. But that party may not be the one from whom you choose to seek damages.

In a personal injury case, such as a car accident or a slip and fall at a retail establishment, insurance companies are the ones that will primarily pay for some, if not all, of the costs of your injuries. 

After you have been hurt, you have a choice as to whether to file a claim against your own insurance company or the insurer of the negligent party. There are benefits and drawbacks to be aware of with each choice.

First-Party Claims Are Filed with Your Insurance Company

A first-party claim is so named because the insurer pays benefits directly to its own insured. 

Thus, when you file a first-party claim, you are filing an insurance claim against your own insurer. You are telling the insurance company you have suffered an event covered under the terms of your insurance policy and are asking the company to pay you benefits accordingly.

A first-party insurance injury claim is demanding that your insurance company honor its contractual agreement with you. As long as the event is covered by the terms of the policy, your insurance company has an obligation to pay you the benefits it agreed to pay. Such obligation is limited by the policy and any restrictions contained therein.

For example, suppose your car insurance policy says that your insurer will pay you up to $25,000 for medical bills in the event of an accident. You are hurt in a crash, and you file a first-party claim. Absent some limitation in the policy itself, your insurance company would be required to pay your claim whether you were at fault or not.

Because payment of a first-party claim does not depend on complicated issues like fault, you can usually receive benefits much faster and with less hassle than filing a third-party claim. However, there may be consequences for filing a first-party claim. Most notably, you will have to pay any deductible required by your policy.

Third-Party Claims Are Filed with the Negligent Party’s Insurance Company

By contrast, a third-party claim is filed with the insurance company insuring the other party in your accident. Again, suppose that you are hurt in a car accident but believe the other driver is responsible for causing the crash. 

You do not want to pay a deductible or risk your rates increasing because of a first-party claim, so you elect to file a claim against the other driver’s insurance policy. This would be a third-party claim.

In a third-party claim, the other insurance company has no contractual responsibility to you. Instead, they are only required to pay your claim if it is shown that their insured customer is responsible for causing you harm and liable to you for damages. 

While there is no requirement for you to pay a deductible, you may have to prove the other person’s fault before their insurer will pay your claim.

Contact Hunt Law Today if You Have Been Injured

Your New Mexico personal injury legal team at Hunt Law Firm is available to help you recover damages following a personal injury accident. Contact us today, and we can assist you in recovering compensation through either a first- or a third-party injury claim.