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Third Party Insurance vs. First Party Insurance

Accidents happen every single day. If you are the victim of an accident, you will want to make sure that there is plenty of insurance coverage to pay for your losses. On the other hand, if you accidentally cause an injury to somebody else, you want to make sure that there is plenty of coverage to protect yourself (and your family) from any potential liability.

There are a ton of insurance questions that are raised when there is an accident (was there coverage at the time of the accident, what are the policy limits, etc.) but one basic issue is whether there is third-party coverage and if not, whether you have first party coverage for your losses.

What is Third Party Insurance?

Third party insurance refers to insurance that you purchase to cover injuries that are caused to another person. In a simple car accident case, the negligent driver’s insurance company is the third party insurer. This is often referred to as a “liability policy.”

What is First Party Insurance?

First party insurance, on the other hand, refers to insurance that you purchase to protect yourself from injuries that are caused to you, whether because of somebody’s negligence or for bad luck. Going back to the car accident case, your insurance company is the first party insurer and would pay for your property damage (assuming you have collision or comprehensive coverage) and could potentially pay for your injuries if you have uninsured/underinsured motorist coverage.

One of the biggest advantages of having a first party insurance policy is the possibility of a bad faith claim against your insurer. This is because the fear of bad faith lawsuits tends to make first party insurers adjust and pay claims quickly and fairly. To see an example of this, click here to learn about UM tenders.

Call a New Orleans Insurance Claim Lawyer

If you are being treated unfairly by an insurance company (whether it’s a first party insurer or third party insurer), The Mahone Firm can help. Call (504) 564-7342 to discuss your case with a business litigation lawyer today.

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Mike Mahone

Mike Mahone is a personal injury and business litigation lawyer located in New Orleans, LA, and the sole practitioner of The Mahone Firm.

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