First-party and third-party insurance claims are very distinct. The laws demand that all licensed drivers stock a minimum amount of accident insurance to cover any damages that happened to any other passenger and his vehicle due to an accident.
A first-party claim is a condition where a person files a request with an insurance company. Second party is an insurance company where the First party applies for an Insurance. Third-party insurance claims are also known as liability claims where a person files a Third-party claim with the insurance company of the driver who caused the accident.
The insurance coverage provided by the insurance company depends on the nature and type of policy bought by the car owner.Based on coverage, there are three types of car insurance policies: Third-party liability car insurance policy, Comprehensive, and Standalone own-damage car insurance policy.
First Party Insurance
First-party insurance is purchased by the insured to cover the losses or damages that happened to the policyholder’s property and themselves.
The first-party is also known as the Car owner who purchased a Car insurance policy.
All car owners are needed to have a personal accident cover of up to Rs.15 lakh. It can be bought either with a car insurance policy or separately.
The Personal Accident cover protects the car owner in case of persistent disability and also for death.
An Insured can also obtain the following covers:
- Third-party legal accident cover for a driver of the policyholders’ car.
- Personal accident cover for the driver of the policyholders’ car.
- A Personal accident cover for co-passengers moving in the insured’s car.
There are few other common types of First-party claims that include:
- Medical Payments covered under Auto Insurance Policy
- Health Insurance
- Personal Injury protection under an Auto insurance policy.
- Uninsured Motorist coverage
- Underinsured Motorist Coverage
- Property damage covers due to Natural disasters.
Third Party Insurance
Third-party insurance is a type of car insurance policy where a policyholder insured against any third party liability arising out of an accident.
Third-party insurance is purchased to guard the insured against the account for losses and damages the policyholder causes to another individual and their property.
This policy grants the first party to claim the compensation from the second party in the below cases:
- Limited coverage of a third party’s bodily injuries.
- Unlimited coverage in case of Third-party’s lasting disability and also for a death
- Coverage up to Rs.7 Lakhs for third party property damage.
There are few other common types of Third-party claims that include:
- Animal liability insurance
- Product liability insurance
- General commercial liability insurance
- Umbrella Insurance policy
- Company Officers liability insurance
Under a third-party insurance claim, the claimer files a claim against the insured, but not the insurance company itself.
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