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Baltimore Personal Injury Lawyer / Blog / Insurance Claim / What Is The Difference Between A 1st And 3rd Party Insurance Claim?

What Is The Difference Between A 1st And 3rd Party Insurance Claim?


Insurance is one of those things that you have to pay for, even though you hope you will never need to use it. You purchase it to protect your interests in your home, business, or other property. Under Maryland law, you must procure auto insurance to legally operate a car. If the time comes that you need to make a claim against your policy, you will be filing a first-party claim. As the Insurance Information Institute (III) explains, you have first-party coverage when dealing with your own insurer. The other common type you may run across is a third-party claim, in which you work with someone else’s insurance company.

If you do not have a background in insurance or law, the difference between first- and third-party claims may seem confusing. The key is understanding your relationship with the insurance company, as your rights vary based on your position. It is wise to consult with a Maryland insurance claim lawyer about your case and get help in dealing with the insurer. You can also read on for an overview of these claims.

 Summary of Third-Party Claims: With this type of insurance claim, you are seeking damages from an insurer that carries a policy for someone else. The only reason you need to deal with this company is that its insured caused an accident in which you suffered harm, and you should be paid under the policy. There is no other direct legal relationship between you and the insurance company, which is why it is called a third-party claim. The insurer owes you no duty, so it can deny your claim without providing any justification. If you are dissatisfied with the claims process, your recourse is taking the case to court.

 How First-Party Coverage Works: With a first-party insurance claim, the laws are different and work in your favor. You have a direct contractual relationship with the company, having signed policy documents and paid your premiums. Your own insurer owes you a duty to act in good faith, which means the company must pay your claim promptly and provide a specific explanation for the denial. Plus, there are numerous regulations in Maryland that impose other requirements and restrictions on first-party claims with insurance companies.

Despite the laws, some insurers still engage in bad-faith insurance practices. Examples include:

  • Disputing that the policy covers the loss, a common tactic with flood and hurricane insurance;
  • Alleging that no loss occurred;
  • Unreasonable delays in processing your claim; and,
  • Failing to conduct a proper investigation into your claim. 

If your insurer acted in bad faith, you have legal remedies as a policyholder. You may qualify to obtain amounts for your denied claim, interest, and other damages.

 Learn More from a Baltimore County Insurance Claim Attorney

This summary should help you appreciate your rights when dealing with an insurance company, and Furman | Honick Law is prepared to assist with enforcing them. Please call 410-844-6000 or visit our website today to schedule a consultation with an experienced insurance claim lawyer.



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