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First Party Vs. Third Party Car Insurance Claims: Filing A Claim With Another Party's Insurance
Article 13 of 13 in What to Know Before Filing a Car Insurance Claim
What can you expect during the car insurance claim process? The answer depends on which party's insurance you are pursuing. If your car insurance claim is with your own insurance company, that is called a first party claim. If your claim is with the other driver's insurance, it is called a third party claim.
TIP:If you have the choice of filing either a first or third party claim, understand the difference between the two and make the best decision for your particular claim. If you have any questions, contact an auto insurance attorney.
First Party Claim - A Claim With Your Insurance Company
You will either work with your agent or a claims adjuster employed by your insurance company when you file a claim for physical damage to your vehicle from a car accident or from vandalism or another type of event under the collision and comprehensive section of your policy, or for injuries sustained in a crash under your medical payments section. For collision or comprehensive damage, most insurers will pay the body or glass shop directly after they receive an estimate from the shop. Occasionally, a claims adjuster will come to your home or work, write an estimate for the damage and hand you a check right on the spot. If you have rental car coverage on your policy and your car must be in the shop for several days or weeks, the insurer will either arrange for a rental car with a company with whom they have a relationship or ask that you call one directly. There is usually a daily or weekly dollar limit and the insurer will pay the rental car company directly. Ask for this limit before you rent the vehicle so you do not go over this amount!
Some people use their own health insurance to cover medical bills resulting from a car accident injury claim, even though they have Medical Payments coverage with their auto insurer. Read your auto policy to determine which coverage is primary and how your insurer handles it if you have double coverage. Although you are entitled to receive payment from your Med Pay coverage on your auto insurance policy, some insurance companies may choose to subrogate, or seek reimbursement for the money they spent on your medical bills from your health insurer if your health insurance is primary. This is especially true if your injury bills were paid by Medicare or Medicaid.
TIP:When dealing with medical payments under you auto insurance, keep in mind that your policy will only cover you for reasonable and necessary treatment and only for an amount that is within your policy limits.
Third Party Claim - A Claim With The Other Driver's Insurance Company
When you are in an accident with another driver and it is at least partially their fault, and you are not in a no-fault state, you may make a claim with the other driver's insurance company. For a Property Damage claim, similar to your own insurer, the other insurer will typically pay the body shop directly for repairs once they receive an estimate from the shop. The other driver's insurance will also pay for your rental car for a reasonable and necessary amount of time during which your car is being repaired.
If your car was totaled, (it would cost more to repair it than its value) they will pay you the ACV (Actual Cash Value) of the vehicle and take the salvage and sell it. They can offer you the salvage (your damaged vehicle) giving you the ACV less the salvage value. An agreement on the ACV must be reached in order to settle this type of claim.
If you are injured and making a Bodily Injury claim with the other driver's insurance company, there are no hard and fast rules regarding settlement. If you are offered a settlement amount that you believe is fair and you want to take it, you will be asked to sign a Release and Waiver, which waives your right to come back and sue the insurance company for more money or their insured at a later time. Even if you learn new information about your injury, the Release and Waiver settles your claim. It is always good practice to have an attorney look at the documents before you sign them. Better still, if you have anything more serious than a very minor injury, it is best to have an attorney review your claim so you know you are being dealt with fairly.
Hiring a Car Accident Attorney
A car accident attorney can be useful regardless of what insurance carrier you file a claim against. Your attorney can:
- Help you choose to file either a First or Third party claim
- Negotiate a fair settlement for your injuries with either you own company or the other driver's
- File a lawsuit to resolve the claim
- If your state allows it, file a complaint for third party bad faith against an insurance company that is not willing to work with you. At the time of this writing, those states are Alabama, Hawaii, Michigan, New Hampshire, Florida, Louisiana and Nebraska. Click here to contact an attorney in your state who specializes in bad faith cases.
TIP:Car accident attorneys offer free consultations! If you are unsure about any part of your auto insurance claim process, it will not hurt you to reach out to an experienced attorney and make sure you are getting the money recovery that you deserve.
For more information about auto insurance claims, check out the following articles:
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