A third party insurance claim is basically when you file an insurance claim against another person. It can be due to an accident or when someone else’s car causes damage to you or your property.
It is important to understand the difference between a first-party and third-party insurance claim because there are different responsibilities and processes required depending on determining the fault after a car accident.
The main takeaway:
- Be prepared in the event of an accident and carry all relevant documents in your vehicle, including registration, insurance ID, and the name and number of the insurance company and rental agent (if applicable).
- Once everyone is safe, be careful to get the other driver’s information and call the police. You must determine who was at fault and you want to be sure you have all the information needed to get an accurate result.
- The third party claim procedure allows you to choose who you want to repair your vehicle. The fault insurance company may have their favorite collision repair workshops, so it’s a good idea to get a quote or two on your own for comparison.
If there is a car accident and you decide you are not at fault, you become the third party and will need to file with their insurance company to claim compensation. Often times, this will be handled by your insurance agent in order to resolve the accident. Let them take the lead because they know the work from the inside out and can be a good defender.
What is a third party insurance claim?
The third party insurance claim is processed and submitted to the other driver’s insurance company and must cover the following:
- Repairs to your car
- Any medical expenses related to the accident
- Transportation for you, your family or your loved ones while your car is being repaired
Since both insurance companies will usually be involved in identifying the error, be sure to include your agent/carrier, as your personal representative, in all communications and interactions.
What do you do after a car accident?
Nobody wants to get in an accident, but sometimes it does. According to the Insurance Information Institute (III), it’s a good idea to be ready early. These things will make it easier if you ever encounter an emergency:
- Make sure you have all relevant information and important documents in your vehicle. This will include:
- vehicle registration
- proof of insurance
- Medical information (doctors names, allergies, medications)
- Rental agent name
- Be prepared for emergencies:
- Flashlights or emergency signs
- small orange cones
- Blankets to provide warmth or comfort if needed
- A first aid kit to provide a little help if needed
- Paper and pen pad
- Be prepared to respond – we hope you don’t get injured, but others may, and it’s always a good idea to have a mobile phone available to call 911 and a basic knowledge of CPR if there’s a life-threatening emergency.
- Don’t claim that there was something wrong with the accident – the officer can decide it at a later time.
Once everyone is safe, it is important to call the police and file an incident report. In some states, during weather-related accidents, such as large snowstorms, you can file a report after the accident. In these cases, it is important to be diligent in gathering the correct information or evidence.
When the police arrive, be sure to write down the police officer’s name and badge number and know the procedures for obtaining a copy of the accident report. Also, be sure to share information with the other driver(s). This will include:
- Name and contact information
- car info
- Insurance ID card information, including the name and number of the carrier and agent
- Write your personal account as quickly as possible before you forget any potentially important details – you will need to retell this story several times.
- Take pictures of the accident, the approach, and any related hazards.
Remember, the more information you get about your other driver’s insurance, the easier it will be for your carrier to solve the problem with minimal direct involvement from you.
If the other person tries to dissuade you from contacting insurance or the police, does not have insurance themselves, or offers to pay an advance payment to cover damages, decline their offer and continue with the above actions.
Insurance claims from the first party versus the third party
Basically, the difference between a first-party and third-party insurance claim is the first-party claim that makes a claim against your insurance. Whereas with a third party claim, you are filing a claim against someone else’s insurance.
When it’s a first-party claim and it’s your personal insurance, this is the insurance you chose. You have signed the contract or entered into the verbal agreement. You have released your personal data and have given them access to your credit history. You pay the bills.
First-party claims can be made for a variety of reasons, including:
- A collision where your car damages another car in an accident, and you are found fault. If the other person files a claim against your insurance, they will be considered a third party claimant.
- Comprehensive coverage means damage caused by other means, such as vandalism, theft, or a tree falling on your vehicle.
- Liability coverage when your vehicle is damaged as a result of an accident.
- Cover for uninsured or insured drivers.
- Health care bills for yourself or others paid under a medical coverage policy.
- Rental Coverage – Most policies today include a rental car to use while your car is being repaired.
- Towing services after an accident.
Third party claims can be against you if you were found at fault following a car accident or on behalf of a different insurance company if you are not at fault. Their purpose is to cover the claims of the injured party – so, basically, for every 2 accidents + car accident, there can be a first party and a third party claimant.
Although it is not surprising that you get into a car accident as there is absolutely nothing wrong with it. In these cases, each person’s insurance covers damages and/or medical expenses.
In False vs No Fault Third Party Claims
Determining what went wrong can be challenging as often everyone involved shares some responsibility when an accident occurs. However, regardless of this, the fault must be determined to see who will pay the damages caused by the accident.
In Fault vs No Fault States
Most states make a mistake when it comes to car accidents. This means that the person who caused the accident must pay all damages. This also means that bodily injury insurance (a component of a comprehensive car insurance policy) pays for all medical expenses and that property damage liability insurance (also a component of their policy) pays for damage to the “third party” person’s car.
However, in the absence of a fault (of which there are only a few), drivers carry personal injury protection or PIP insurance. PIP insurance covers everyone’s medical expenses and lost wages after a car accident, regardless of who may be at fault.
In the absence of fault, you can file a claim from a third party for property damage only and use your personal PIP policy to cover any medical claims.
Error insurance is designed to pay personal injury claims quickly and to reduce the number of small dollar claims outside the court system. It has been somewhat successful, but a number of state legislatures still hold off their PIP requirements and are back in error state.
What information is required to submit a third party claim?
To make a claim from a third party, you need to know the personal information of the driver at fault, such as name, phone number, insurance policy number and any details about the accident. It is also useful to know the make and model of the vehicle being driven as well as the license plate number.
Again, make sure you prepare an accurate police report and intercept any errors that may come up – it could cost you and your insurance company a lot of money if it is determined that you were at fault or that there was no fault in the accident when, in fact, there was.
Third Party Insurance Claim Procedure
While each insurer has its own way of starting and managing the claims process, you and your insurance agent will likely work with the claims representative or adjuster from the insurer of the faulty party.
The officer will review the police report and any witness statements, talk to you and his client about the details of the accident, and examine the damage to your vehicle (in person). Based on their summary report, they identify the fault and will pay your claim according to the faulty person’s auto insurance policy.
A check will be issued to the third party, you, or to the collision repair shop for damages.
Can I choose my own repair shop?
According to III, it is always good to have At least onceIf not more, estimates from your trusted mechanic, dealer, or garage. This way you have a reliable base to work with and you can evaluate multiple quotes if necessary.
The insurance company that pays the claim may encourage you to work with a repair shop within their network. It is always in your best interest to get a quote from this store to compare with the quotes you got in person.
However, in the end, you don’t have to use the pre-defined collision set. Each state allows you to choose who ultimately works on your vehicle. Check here for guidelines by state.
After an accident (and also annually), you may want to check insurance rates to see that you weren’t unfairly affected by an accident that wasn’t your fault.
Why check insurance rates annually?
Financial advisors often advise conducting an annual insurance review on all policies, including your car insurance. They often cite three excellent reasons:
- It can save you money. The cost of insurance is expensive, and you want to be sure that you get the best rate for your money. An annual review ensures that you get the best value for your dollar.
- You may notice changes you overlooked, such as a change in your driving history or the number of miles you drive in your daily commute (for example, many people are working from home after the pandemic and giving up their daily commute). These are the kinds of things that can lower insurance costs and improve your monthly budget.
- It’s easy – today, you can get quotes online for multiple insurance companies in minutes. No more time spent tracking down information or talking to multiple agents. You can get the best price or value for your money in no time.
How to compare car insurance rates
It’s quick and easy to compare auto insurance quotes from industry-leading national insurance companies. With our auto insurance rate generator, you can enter some simple information and compare rates in seconds.
Simply enter your basic information, including some personal details and information about your vehicle and past driving history, click submit, and your data will be safely and securely evaluated giving you quotes from major insurance companies – the names you will recognize.
From there, you can simply compare your quotes, talk to as many agents as you like, and decide which option is best for you.
The bulk – no fees, no obligations. And while checking your credit report, it’s a simple inquiry, so there won’t be any negative impact on your credit score.
Contact einsurance.com for the latest auto insurance rates today or call 866-845-3808.