Third Party Insurance Claims
Third party insurance claims aren't as difficult to understand as they may sound.
When you file a car insurance claim, it can be either a first party claim or a third party claim. A first party claim involves your insurance company, while a third party claim involves the insurance company of the other driver in an accident. The type of car insurance you carry, and the type of auto accident, may determine your decision to file either a first or third party claim.
Why File a Third Party Claim?
You should take this action when you feel the other driver caused the accident. This means you need to contact that driver's insurance carrier, let it know an accident occurred with one of its policyholders, and provide additional details concerning the incident.
If the third party insurer agrees that its customer caused the accident, it will pay for your accident expenses, and your insurer won't be involved - providing, of course, the other driver carries the proper type and amount of protection.
If that's not the case, you can file a claim with your own carrier - if you have underinsured coverage - to try to get money for your accident bills. Or, you can sue the other driver and attempt to collect the money through the court system.
Before the third party carrier sides with your case, it will investigate the accident to determine if their insured was responsible for the crash, and to what degree.
The Downside of Third Party Claims
You may be used to working with your own auto insurance company, and it can get tough when you have to communicate with a third party insurer. After all, you're not a customer to them, and haven't paid them a dime in premiums. A third party insurer will protect its own interest - as well as that of their own customers - before yours.
So, extracting the money rightfully owed to you can be a challenge, and a test of your patience. It helps, though, if you have strong supporting evidence about the accident. For example, a copy of the police report citing the other driver, or eyewitnesses who confirm your version of the event.
But, even with this you may experience delays in getting the other carrier to move in a timely manner. This could be due to the other driver failing to file a claim, or taking a while to do so. Or, it could happen if the insurance company handles the claims process at a deliberate pace.
Should You Subrogate?
If you're unhappy with the speed of the claims action, you can choose to involve your insurer by filing the claim against your own policy (assuming you have the appropriate coverage).
You'll have to pay the applicable deductibles, let your insurer go through its own claims process, and allow your insurer to pay the money due to you.
If your carrier feels the other party is at fault, they may request that you subrogate (or assign) your rights under your policy so they can try to collect the money from the other carrier or the other driver.
If your insurer succeeds - and it usually will - they'll get back the money they paid to you. And, they'll often collect enough money to refund your deductible payments. Your insurance premiums will not go up because of this action.
Getting Additional Information
Contact your carrier or your insurance agent if you're still unsure about how third party claims work, or you want to know more about the subrogation process.
Although you may be new to all of this, your car insurance company handles thousands of claims each year and can give you the direction you need following your accident.