You may have to decide between a first and third-party claim after an auto accident. The circumstances of the accident determine the best option for you. Below are three ways in which these claims differ. Both claims will get you auto accident compensation, but they differ in major ways.
Liability
A third-party claim is only possible if someone else is responsible for your accident. You can file a first-party claim whether you or another party is liable for the crash. This distinction also means you must prove liability to get a third-party settlement, which is not mandatory for first-party claims.
Consider a case where a driver hits your car and drives off. You can file a third-party claim if the police or you manage to track down the driver. Alternatively, you may file a first-party claim if you fail to track the driver and have uninsured motorist coverage.
Coverage
A first-party claim requires insurance coverage because you file the claim with your insurance company. The insurance should also cover the incident or accident. Consider a pothole accident that damages your car. You can only file a first-party claim if you have collision coverage.
For most cases, you may file a third-party claim whether or not you have insurance coverage. Just know that some states have no pay, no play states rules that limit the damages you may collect if you don't have auto insurance. For example, the rules may limit your recovery to economic damages.
Bad-faith Claim
You can file a bad faith claim if your insurance company fails to abide by the terms of your insurance policy. For example, you can file a bad-faith claim if the insurance company:
- Unreasonably delays with your claim processing
- Refuses to settle your claim without any explanation
- Engages in deceptive practices, for example, by failing to notify you of critical deadlines
- Offers unreasonably low compensation without explanation
The bad faith claim is separate from your accident claim and attracts penalties.
You cannot file a bad faith claim in a third-party claim because you don't have a contractual agreement with the defendant's insurance company. Your only recourse, should the insurance company engage in dirty tactics, is to file a lawsuit and let the court rule on the issue.
Whichever claim you file, you deserve full compensation for the applicable damages. Remember, your evidence strength determines your likelihood of winning. Consult with an auto accident law firm such as Craig P. Kenny & Associates to help you strengthen your case and get the compensation you deserve.