What is the difference between first-party and third-party insurance claims?

First-party insurance claims are those which are initiated by the insured, the policyholder, against their own insurance company. Such claims are typically made when an individual is seeking a financial recovery from their own insurance policy due to damage or harm they have suffered. Third-party insurance claims are those which are initiated by an injured party against the insurance company of another party who caused the damage or harm that gave rise to the claim. For instance, if one driver rear-ended another, the injured driver would likely bring a claim against the insurance company of the driver at fault. In Maryland, all insurance policies must contain coverage for claims made by third-parties, though the minimum coverage may vary depending on the type of policy. That said, an important distinction between first-party and third-party insurance claims is that first-party claims are governed by contract law and generally provide for a higher recovery than most third-party claims. This is because the insurance contract sets out the specific obligations of the insurance company to the insured and provides for a recovery for damages beyond the basic compensation provided in most third-party claims.

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What is the difference between first-party and third-party insurance claims?

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