First-Party, Second-Party, and Third-Party – What Does It All Mean?
Different Parties of a Claim Explained
When discussing personal injury or insurance claims, You’ll come across the term “party.” Specifically, the terms “first party”, “third party” are used quite often. This can quickly become confusing if you do not know what a “party” is. Without knowing what these terms are, you may understand how they apply to your injury claim.
What is a Party?
A party is something fun, right? In the claims process, a “party” is a person, group, business, or entity forming one side in an agreement or dispute. With insurance claims, we have first-, second-, and third-party claims.
What “First Party” and “Third Party” Really Mean
First-party describes you. Therefore, first-party insurance covers your losses. This is your own policy coverage and it covers you. Personal injury protection and uninsured/underinsured motorist coverage are examples of first-party coverage.
Third-party describes others that file a claim against you. This is “liability” coverage. Liability insurance covers others that you hurt or property you damage. Examples of third-party coverage are property damage and bodily injury.
You are the “third party” if you file a claim against someone else’s insurance coverage.
This is a little out of order. But, when we talk about the different parties involved in claims, the second party is the insurance company. You are the first party. Your insurance is the second party. The third-party is anyone (other than you) that files a claim against your coverage.
A Basic Example of First- and Third-Party Claims
Here is a basic example of your roles in a common injury claim. You are driving home from work. Another driver doesn’t see their red light and hits your car. You’re injured and your car is a total loss.
Your First-Party Claim
You’re injured, and you seek medical treatment. Even with PA state-minimum car insurance, you have at least $5,000 of personal injury protection. Your own insurance covers the first $5,000 of medical bills. This is a first-party claim.
Your Third-Party Claim
Your treatment is going well. But, the medical expenses are going over $5,000. Your personal injury coverage runs out. Now, you file a claim against the at-fault driver’s coverage. This is a third-party claim.
Know Your Insurance Coverage
To understand these terms and how they apply in your case, you need to understand the role that insurance policies play in injury claims. Even state-minimum insurance covers first-party and third-party claims.
Filing a claim isn’t always easy. Some insurance companies will make you fight for the money you deserve. People often give up. Smart people talk to an injury attorney for advice.
File an Injury Claim
Most people never need to file an injury claim. If you need to file an injury claim, talk to a personal injury attorney for advice. The last thing you want to do is say the wrong thing to an insurance agent.
Kane And Silverman Will Help You
At Kane and Silverman, we are here to help. We know that legal terms may make a difficult situation even more frustrating. You can schedule a free consultation with one of our experienced lawyers who will help you make an informed decision on your next steps. Contact us for a free consultation.