What is First Party Insurance Claim?

When it comes to insurance, there are two types of claims you can make: first party and third party. A first party insurance claim is a claim made by an insured against their own insurance policy. It is often referred to as a "claim of self-insurance." On the other hand, a third party insurance claim is a claim made by another person or entity against the insured's policy.

What are Some Examples of First Party Insurance Claims?

Usually, when you purchase an insurance policy, you are agreeing to be liable for any losses incurred as a result of an accident or incident. As such, a first party insurance claim is any claim you make against your own policy. This includes claims for medical expenses, property damage, or any other losses that are covered under your policy.

For example, if you are injured in a car accident and have medical expenses that are covered by your insurance policy, you would be making a first party insurance claim. Likewise, if you suffer property damage in a storm and your policy covers those losses, you would be making a first party claim against your policy.

What are the Benefits of Making a First Party Insurance Claim?

One of the major benefits of making a first party insurance claim is that it can save you time and money. When you make a third party claim, you are typically responsible for paying out-of-pocket expenses or negotiating with the other party's insurance company. This can be a lengthy and costly process. On the other hand, when you make a first party claim, the process is usually much simpler and the funds are more quickly available.

Making a first party claim can also provide you with more control over the claims process. When you make a third party claim, you are often at the mercy of the other party's insurance company. With a first party claim, however, you are in charge of the process and can decide how to proceed.

Are There Any Drawbacks to Making a First Party Insurance Claim?

One of the potential drawbacks of making a first party claim is that it can sometimes cause your premiums to increase. This is because when you make a claim against your own policy, your insurance company may view you as a greater risk and may raise your premiums accordingly.

Additionally, if you make multiple first party claims in a short period of time, your insurance company may decide to drop your coverage. This is because insurance companies typically view multiple claims as an indication of an increased risk.

In Conclusion

Overall, making a first party insurance claim can be beneficial if you are looking to quickly receive compensation for covered losses. However, it is important to be aware of the potential drawbacks, such as increased premiums and the risk of your coverage being dropped. It is always a good idea to carefully review your policy and understand the potential risks before making a first party claim.