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Difference Between First-Party and Third-Party Insurance Claims

After an auto accident who pays for the damages? The short answer is the insurance company, but which one: theirs or yours? That depends on who was at fault and with whom you file a claim. First-party insurance claims are filed with your insurance, whereas third-party insurance claims are filed with the other driver’s insurance. Imagine that as you are driving in traffic in Billings’ January snow and the truck in front swerves to avoid a traffic cone. You manage to slam on your brakes but — crunch — the truck behind you cannot stop as fast, and now your bumper looks like a smashed Twinkie.  You call the police, they come and determine that you were not at fault for the accident. There are two paths to getting an insurance company to pay to repair your vehicle.

Through Your Own Auto Policy: First-Party Insurance Claims

Your first option is to use your own auto insurance. To file a first-party insurance claim, you call your insurance agent. She helps you get a rental car and an estimate to fix your bumper. If the car is not a total loss, your insurance will cover the repairs.

However, in a first-party claim, you are responsible for paying the deductible if your policy has one. You can recoup those costs if you were not at fault for the accident, but the process is a long one. Your insurance company will attempt to get money from the at-fault party’s insurance company to cover the accident. If the insurance company is successful, they may send a refund on your deductible.

Through the At-Fault Auto Policy: Third-Party Insurance Claims

Or you can exercise your other option: After you call your insurance company first (because you always should), you also contact the at-fault party’s insurance company and file a claim with them. You can usually find the other driver’s insurance information on the accident report given to you by police.

The other company will have to haggle with your insurance company to determine who was at-fault for the accident. In a rear-end collision, fault is usually clear, and there are no problems. If the two companies determine that the other driver is at-fault for the accident, the other insurance company will contact you and work with you to repair your vehicle and provide a rental car if need be.

It is usually an easy process in simple accident cases. If you find that the insurance agents are stonewalling you and haggling about fault, or if there are serious injuries involved, do not hesitate to contact an attorney to deal with any third-party insurance claims.

Remember to use caution when talking to any insurance company especially one that is not yours. You may say something wrong. The insurance company may use your own words against you. In accidents with injuries or serious damages it is better to speak with your attorney before speaking to another person’s insurance company.