When it comes to personal injury insurance claims, there are two primary categories to consider: first-party claims and third-party claims. First-party insurance claims are made by the insured directly with their insurance provider, while third-party claims are filed by a person (not the policyholder) against another person’s insurance company.
Understanding these two types of claims is crucial to navigating the often complex insurance claims process. In the following sections, we will delve deeper into each type, shedding light on their differences, processes, and respective advantages and disadvantages.
A third-party insurance claim is a claim made by an individual who is not the policyholder, against the insurance company of the person responsible for an accident or injury. This type of claim typically arises when the policyholder is found at fault for causing damage or injury to the claimant.
Consider this scenario: You’re driving home on a rainy night when suddenly another car swerves into your lane, causing a collision. You sustain injuries that require medical attention, and your car also suffers considerable damage. In this case, if the other driver is deemed at fault for the accident, you have the right to file a third-party insurance claim.
You would file the claim against the at-fault driver’s insurance company, seeking compensation for your economic damages, such as medical expenses, repair costs for your vehicle, and any lost wages due to your inability to work during your recovery. This process would involve gathering necessary evidence including accident reports, medical records and bills, and proof of your lost income, and then negotiating with the at-fault driver’s insurance company to settle.
If your accident was severe, you may also claim non-economic damages, such as your pain and suffering. Further, if the defendant driver was grossly negligent, such as in drunk driving wrecks, you may claim punitive damages, as well.
In Texas, like in many other states, the person who is found at fault for causing an accident is responsible for covering the types of damages incurred. Therefore, if you’re injured in an accident caused by another driver, you would file a third-party claim against the at-fault driver’s insurance company. The insurance company then investigates the claim, reviewing evidence like the police report, photos of the scene, and any medical reports to determine the extent of their policyholder’s liability.
If the insurance company agrees with your claim, they will pay you up to the limit of the at-fault driver’s policy. However, if your damages exceed the policy limit, you may have to seek further compensation from the at-fault driver directly, possibly through a lawsuit or in small claims court.
Keep in mind that Texas utilizes a modified comparative fault system. This means if you’re found to be partially at fault for the accident, your compensation might be reduced by your percentage of fault. For instance, if you’re found to be 20% at fault, you might only receive 80% of the overall damages.
A first-party insurance claim is a claim made by the policyholder directly to their own insurance company. This type of claim arises when you, as the policyholder, suffer damages from an accident or incident covered by your insurance policy.
For instance, if you’re involved in a car accident where you are at fault, or in a no-fault accident scenario, you would file a first-party claim with your own insurance provider. The claim can cover expenses like medical bills, vehicle repairs, diminished value, or property damage, depending on the specifics of your policy coverage.
The first-party insurance claims process is often simpler and faster, as it typically involves dealing directly with your own insurance company. However, the claim amount is limited to the terms and coverage limits of your policy, which can be found on your declarations page.
Consider this scenario: You’re stopped at a red light when suddenly you’re rear-ended by another vehicle. The driver who hit you admits to being uninsured. In this case, you would file a first-party insurance claim using your Uninsured Motorist (UM) and Personal Injury Protection (PIP) coverages, provided they are included in your policy.
Your UM coverage comes into play here as it provides protection when you’re hit by a driver who doesn’t have insurance. It would cover the repair costs for your vehicle and possibly your medical expenses, depending on your state’s laws and the specifics of your policy.
Your PIP coverage, on the other hand, is designed to pay for your medical expenses, regardless of who is at fault. So, even though the other driver caused the accident, your PIP coverage can help pay for your medical bills.
In Texas, the process for filing a first-party insurance claim is straightforward. First, you must notify your insurance company of the incident as soon as possible. The notification should be followed by a detailed account of the incident and the submission of supporting documents such as police reports, medical records, and repair estimates.
Your insurance company will then review your claim, assess the damage, and determine the compensation based on your policy coverage limits. It’s important to remember that compensation is subject to the terms of your insurance policy. For instance, if you only have liability insurance, your policy won’t cover your damages in an accident where you are at fault. However, if you have comprehensive and collision coverage, these damages could be covered.
Dealing with first-party insurance claims in Texas may seem easier as you are dealing with your own insurance provider. However, it’s always wise to understand your policy thoroughly to ensure you receive the fair amount of compensation you deserve.
Determining whether to file a first-party or third-party insurance claim largely depends on the specifics of your accident and insurance coverage. As a general rule, if you are at fault for an accident or the other driver is uninsured or underinsured, you would submit a first-party claim to your own insurance company. Alternatively, if another driver is at fault and they have adequate insurance, you would submit a third-party claim to their insurance company.
However, there may be instances where you could file both types of claims. For example, if the at-fault driver’s insurance coverage is insufficient to cover all your damages, you could file a third-party claim against their insurance company for up to the limit of their policy, and then a first-party claim with your own insurance company for the remaining amount, subject to your policy’s coverage limit. Or if you were hit by an uninsured or underinsured driver, you could file a first-party claim with your own insurance company, assuming you have uninsured/underinsured motorist coverage.
The process for a personal injury insurance claim starts with the injured party, also known as the claimant, notifying the at-fault party’s insurance company about the incident. This usually involves providing a detailed account of the incident, including how the accident occurred, the extent of the injuries, and the impact the injuries have had on the claimant’s life. The insurance company will then investigate the claim, which may involve reviewing police reports, photos of the incident, medical records, and any other relevant evidence.
After the investigation, the insurance company will make a decision regarding the claim. If the claim is approved, the insurance company will negotiate with the claimant or their attorney to agree on a settlement amount. This amount should ideally cover all medical expenses, lost wages, and any pain and suffering incurred due to the accident.
If an agreement cannot be reached, the claimant may decide to file a lawsuit against the at-fault party. In this case, the matter will be settled in court, where a judge or jury will determine the amount of compensation the claimant should receive. The process can vary depending on the specific circumstances of each case, including the severity of the injuries and the negligence laws of the state where the accident occurred.
A bad faith insurance claim arises when an insurance company fails to fulfill its obligations to its policyholder under the terms of the policy or the law. This could involve denying a claim without a valid reason, delaying the claims process unnecessarily, or failing to conduct a thorough investigation of a claim.
Here are some examples of an insurance company acting in bad faith:
These examples are by no means exhaustive, and it’s always recommended that policyholders seek legal advice if they believe they are a victim of a bad faith insurance claim.
Insurance subrogation is a legal right that allows an insurance company to make a payment that is owed by another party, and then seek reimbursement from this party. This often comes into play in insurance claims, where the insurer pays its insured for damages, and then makes its own claim against others who may have caused the damage, been responsible for it, or contributed to it.
When a policyholder files a claim, their insurance company will pay the claim if it’s covered under the policy. Then, in the subrogation process, the insurance company may try to recover the money it paid to the policyholder from the at-fault party or their insurance company. This is particularly common in car accident cases where one driver is clearly and completely at fault.
For example, let’s say Driver A’s car is hit by Driver B, and Driver B is at fault. Driver A’s insurance company pays for Driver A’s car repair costs. Then, through the process of subrogation, Driver A’s insurance company would seek to recover the money it paid out for the car repairs from Driver B or Driver B’s insurance company. If the insurance company is successful in its subrogation claim, the policyholder may also be able to recover their deductible, which is the amount they had to pay out-of-pocket for the damages.
A personal injury attorney can simplify the often complex process of filing and defending a personal injury claim. They have the requisite knowledge, experience, and resources to maneuver through the legal landscape, ensuring you get the compensation you deserve.
At Thompson Law, we understand the stress and emotional turmoil you may be undergoing following an accident. Our dedicated team is committed to fighting for your rights, whether it involves negotiating with insurance companies, navigating through the subrogation process, or representing you in court. We’re ready to discuss your case and explore your options.
To find out more about how a personal injury attorney can help you with insurance claims, or to schedule a FREE CONSULTATION with Thompson Law, please contact us today.
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