When you suffer an injury in an accident, one of your main concerns will be who will pay for the damages and losses you’re coping with. Accidents give rise to many unexpected expenses related to your medical care, your lost income, and other damages that can swiftly become a burden on your finances. While the amount of time it takes to reach an agreeable solution can vary, the sooner you take action in your case, the better the position you will be in.
In many cases, an insurance company will initially evaluate your claim for personal injury and negotiate a settlement with you for your losses. The insurance claims process can be a burdensome and frustrating experience in and of itself. You are going up against seasoned professionals in their industry that understand the ins and outs of personal injury claims.
These insurance representatives work only for the insurance companies, and your rights and interests are not their priority. In fact, any communication, omission, or error on your part can have the unintended consequence of a claim denial or low settlement offer for your injuries. Only a personal injury lawyer can protect you from these traps.
Are All Insurance Claims the Same?
After an accident, you will likely experience chaos and confusion, not only at the scene but also in the aftermath as you seek recovery for your damages. When an accident occurs, there is often another individual or party that is involved who may or may not be at fault. Combine those parties with their insurers and your own insurance company, and suddenly a significant number of vested interests are linked to this one event. You’ll need help untangling this mess and getting the money you deserve!
As you prepare to initiate a personal injury claim, you may not know whom to contact and whom to pursue for the damages and losses you incurred. Seeking recovery from the wrong party can lead to unnecessary delays and difficulties in your case and may jeopardize your overall recovery efforts. A lawyer can make sure you’re on the right path when seeking compensation.
Contrary to what some people may believe, all insurance claims are not the same. Several factors determine which insurance company bears primary responsibility for your personal injury claim.
Factors that can influence the type of insurance claim you will file include:
- Your relationship with an insurance company
- The determination of fault in an accident case
- Whether the party responsible is insured
- The policy limits on the insurance plan
First Party Insurance Claim Versus a Third Party Insurance Claim
Insurance claims are messy and unless you are an insurance representative or attorney, it can be difficult to understand the intricacies of each policy and when they apply to a particular situation. Oftentimes, individuals consider insurance claims as a general concept but do not realize the differences between filing a personal injury claim as a first-party or third party. The claim that is ultimately filed for an injury can make a difference in the availability of recovery for certain damages as well as limitations in compensation or eligibility.
The moment an accident happens, many complex relationships are created. While some relationships exist beforehand (such as between you and your insurer), others are a result of the accident itself (such as between you and an at-fault party and their insurer.) These relationships become important after an accident because they will help you determine the best route for you to seek monetary compensation for your losses. Your legal rights and available remedies can differ depending on the kind of claim you file after an accident. It is always best after an accident to consult with a personal injury attorney for guidance on the insurance claims process and to discuss your best options.
First-Party Insurance Claim
Many people pay their insurance premiums every month, but they lack an in-depth understanding of the contractual obligations and limitations of the policies they acquire and the plans they select. In a first-party claim, an individual deals directly with their own insurance company to process a claim for the injuries and damages they have suffered as a result of an accident. You, the policyholder, are in the process of claiming the benefits for which you have paid under your policy.
In a first-party insurance claim situation, your claim is limited to the terms and conditions of your policy with the insurance company. When you begin any insurance policy, you enter into a contract between yourself and the insurance company. This contract spells out the coverage available to you and the circumstances in which you can and can’t seek compensation under your plan.
The most common examples of first-party insurance relationships are:
- Car insurance
- Health insurance
- Homeowner’s policy
- Renter’s insurance
Due to the contractual relationship between you and your insurance company, there may be certain requirements that must be met for you to successfully file a claim with your insurer. Insurance contracts will include notification requirements regarding an accident or injury. They will also indicate the limits of your policy for specific damages and what it will cover under the agreement.
Common situations in which an individual may wish to file a claim with their own insurer include:
- An accident in which you are at-fault
- An accident with an uninsured or underinsured motorist, if you have selected UM/UI as part of your policy
- Collision repairs for damaged property in an auto accident
Third-Party Insurance Claim
When you are involved in an accident and another individual or party is at fault for your injuries, you may be entitled to compensation from their insurance company. When an accident victim is involved in an accident with an at-fault policyholder and the victim proceeds to file a claim with the at-fault party’s insurance company, this is the definition of a third-party claim.
This is a unique relationship because the victim is under no contractual agreement with the third-party insurance provider. Still, they are able to seek compensation for the damages they have suffered related to the accident and the injuries caused by the at-fault party. This often includes compensation for damages that policyholders themselves cannot receive, like medical expenses, lost income, pain and suffering, and future expenses related to the victim’s accident injuries.
Common examples of third-party accident claims include:
- Car accident claims
- Property liability claims
- Product liability claims
Third-party claims are the most common types of claim in accident cases where a victim is injured due to the negligence of another party. These liability claims can be negotiated with insurance companies for a reasonable settlement or can ultimately go to a trial if a settlement cannot be reached.
Common situations in which you would file a third party insurance claim include:
- When you are injured in an accident that is someone else’s fault
- You suffer an injury such as a slip and fall on another person’s property
- You are injured due to a defective product
What Is Subrogation?
The fault determination in an accident is not always clear in the days following an accident. In some instances, an injury victim may choose to have their own insurance company step in to apply coverage for their property damages and other losses during this period. In other instances, an at-fault party’s insurance company may be unresponsive or cause delays that burden an accident victim and their insurance will begin to process their claim to speed up the process. In these circumstances, an accident victim is in effect filing a first-party claim and will receive payment from their insurer directly rather than from the insurer of the at-fault party.
Do not assume your insurer will just simply take the loss, but rather they will pay you upfront and then proceed to seek subrogation from the at-fault party’s insurance company. Subrogation allows your insurer to have the legal right to seek compensation from the opposing insurance company for the damages paid out to you. In most cases, this will be settled among insurance companies; however, if necessary, your insurance company can sue the at-fault party’s insurer for reimbursement.
The purpose of subrogation is to allow insurers to process claims more quickly and resolve matters with their policyholders as efficiently as possible while still protecting you and your insurer from incurring losses that are not attributed to your fault or actions.
What Is a Bad Faith Claim?
We can’t stress this enough: insurance company representatives are not all looking out for your best interests. They care only about the interests of their company and their bottom line. Many people expect to be given the runaround and face difficulties when negotiating with another party’s insurers, but they can be caught off guard when they face similar difficulties and complications in dealing with their own insurance company.
Where’s a helping hand when you need one? After all, you pay your premiums as a policyholder with the expectation that when an accident occurs, your losses will be covered and you can recover the damages you suffer due to an injury. Unfortunately, the insurance companies do not always do what is right. They may try to deny your claim or placate you with insufficient and unreasonable settlement offers. However, when their interests conflict with your rights under the law and the contract between yourself, the policyholder, and the company, it can be determined as acting in bad faith.
Under the law, a policyholder can sue their insurance company for the compensation they deserve after an accident, plus additional damages if your insurer acted in bad faith. Bad faith claims can arise for several reasons during a first-party insurance claim.
Under Texas law, an individual can only sue their own insurance company for a bad faith claim. Bad faith claims do not apply to third-party accident claims.
To prove a bad faith claim, a policyholder must often show that the actions of the insurance company or its representatives were intentional or negligent and caused the policyholder harm.
What Claim Should You File in Your Injury Case?
Injury victims want a resolution as quickly as possible, and they deserve relief. But how can they reach that goal?
It isn’t always clear what type of insurance claim should be filed after an accident. Each accident is unique and involves particular facts and circumstances that will contribute to figuring out which claim should be filed in your case. For these reasons and more, it is best to always contact a personal injury attorney if you have been injured in an accident. A lawyer can help evaluate your case as well as the related insurance companies and policies to help you decide the best course of action. With the right attorney by your side, you can recover from the losses you have suffered.
Note: Be cautious in your communications after an accident with insurance companies! While you are required to notify your insurance company in a first-party claim that an accident has occurred, any additional statements or information can cause unintended harm or delay in your case.
Insurance claims representatives may attempt to make contact with you soon after an accident. While they may appear friendly and concerned for your wellbeing, they really intend to extract as much information as possible from you regarding the accident and your injuries. Do not make statements or answer questions about an accident to anyone in the aftermath of an accident without first consulting with an attorney. You are under no obligation to provide recorded statements to the insurance company. Insurance companies, whether they are your own or that of an at-fault party, look for any reason to deny or reduce their liability and necessary payout in a personal injury claim. Don’t fall for this trap.
A personal injury lawyer understands the personal injury process and how to protect your legal rights and interests from the outset of your case. Contact a personal injury attorney to represent you and act on your behalf during your personal injury claims process and the negotiation of settlement for your injuries, losses, and damages.
Since starting his firm in 1999, Stewart J. Guss has had the honor of representing clients from all over the world, helping them recover from even the most catastrophic injuries.
Today, thanks to a strong belief in those values of compassion, respect, and approachability, the firm has grown to employ over 120 legal professionals in numerous offices across 4 states, with nationwide reach.