What Are the Three Types of Insurance Claims?
1. First-Party Insurance Claims
A first-party insurance claim is filed by a policyholder directly with their own insurance company after experiencing a covered loss. In this type of claim, you (the insured) are seeking compensation under the terms of your own policy.
For example, if your home is damaged in a storm, you would file a claim with your homeowners' insurance provider. If you are injured in a car accident and use your Personal Injury Protection (PIP) or uninsured motorist coverage, that is also a first-party claim. Health insurance claims you submit for medical treatment fall into this category as well.
The insurance company has a contractual obligation to investigate, evaluate, and pay valid claims promptly and fairly. Because this relationship is based on a contract, disputes often center around policy language, coverage limits, deductibles, or exclusions. If the insurer delays, underpays, or wrongfully denies the claim, it may lead to a bad-faith insurance dispute.
First-party claims are the most common type of insurance claims and typically involve property damage, medical expenses, or other direct losses suffered by the policyholder.
2. Third-Party Insurance Claims
A third-party insurance claim occurs when you file a claim against someone else’s insurance policy because they caused your injury or damage. In this situation, you are not the policyholder — you are the injured party seeking compensation from another person’s insurer.
A common example is a car accident where another driver is at fault. Instead of filing with your own insurer, you submit a claim to the at-fault driver’s auto insurance company for vehicle repairs, medical bills, lost wages, and possibly pain and suffering.
Liability insurance policies — such as auto liability, commercial liability, or homeowners liability coverage — are designed to cover these types of claims. The insurance company’s duty is to defend and indemnify its policyholder, not you. This often makes third-party claims more adversarial because the insurer’s priority is protecting its insured and minimizing payouts.
If negotiations fail, third-party claims may lead to lawsuits, where the court determines liability and damages.
3. Liability Insurance Claims
Liability insurance claims arise when someone files a claim against you for damages or injuries you allegedly caused. In this case, you are the policyholder, and your insurer steps in to protect you.
For example, if someone slips and falls on your property and sues you, your homeowners' liability insurance may provide legal defense and cover settlement costs. Similarly, businesses rely on general liability insurance when customers or clients claim injury or financial harm.
One key feature of liability claims is the insurer’s “duty to defend.” This means the insurance company must provide legal representation and potentially pay judgments or settlements up to the policy limits.
Understanding these three types of claims — first-party, third-party, and liability — helps policyholders better navigate the insurance process and know their rights, responsibilities, and coverage options.
