What Are Third-Party Insurance Claims?

Key Takeaways

• A third-party insurance claim is filed against another person's insurance rather than your own.
• After a car accident, you generally make the claim against the liability coverage of the driver who caused the crash.
• The insurance company investigates fault, damages, and whether its policy provides coverage for the accident.
• Illinois requires drivers to carry minimum bodily injury and property damage liability insurance.
• You can seek compensation for covered losses such as medical expenses, lost income, vehicle damage, and pain and suffering.
• If the insurer denies liability or refuses to offer appropriate compensation, a personal injury lawsuit may be another option.

What Is a Third-Party Insurance Claim?

A third-party insurance claim is a claim made by someone who is not the policyholder against the policyholder's liability insurance.

There are three parties involved:

1. The first party: The person who purchased the insurance policy and is insured under it.
2. The second party: The insurance company that issued the policy.
3. The third party: The person seeking compensation because the insured allegedly caused an injury or property damage.

For example, suppose you stop at a red light and another driver rear-ends your vehicle. If the other driver caused the collision, you can make a claim against that driver's liability insurance for your resulting losses. You are the third party because you are not a party to the insurance contract between the driver and the insurer.

This type of claim is common after car accidents, but third-party liability claims can arise in other situations where a person's or business's insurance covers liability for injuries caused to someone else.

What Is the Difference Between First-Party and Third-Party Insurance Claims?

The simplest distinction is whose insurance company receives your claim.

A first-party insurance claim involves seeking applicable benefits under your own policy. A third-party insurance claim seeks compensation through another person's liability insurance because you allege that person caused your injuries or property damage.

After a car accident caused by another driver, options may include:

• Filing a third-party claim against the at-fault driver's liability insurance
• Using applicable coverage available under your own policy
• Pursuing a lawsuit against the responsible driver when appropriate

Which option applies depends on how the accident happened, the available insurance coverage, and the types of losses involved.

If the other driver is uninsured or does not have enough coverage for your losses, your own uninsured or underinsured motorist coverage may also become important.

How Do Third-Party Insurance Claims Work After a Car Accident?

After you notify the at-fault driver's insurer of your claim, the company typically assigns an adjuster to investigate.

The adjuster may review:

• Statements from the drivers
• The police crash report
• Photographs or video
• Vehicle damage
• Witness statements
• Medical records and bills
• Lost-wage documentation
• Other evidence concerning fault and damages

The insurer then determines whether it believes its policyholder is responsible and whether the policy covers the accident.

If the company accepts liability, it may negotiate payment for your property damage and injuries. If it disputes liability, it may reduce the amount it is willing to pay or deny the claim.

One important distinction is that the other driver's insurer is not your insurance company. You do not have a contractual relationship with it simply because its policyholder injured you. Its role is to investigate the claim made against its insured and determine what it believes it owes under the policy and applicable law.

Who Is at Fault in a Third-Party Insurance Claim?

Fault is central to most third-party insurance claims because liability coverage generally pays when the insured is legally responsible for causing another person's losses. Illinois uses a fault-based system. After a collision, evidence is used to determine which driver caused the accident and whether more than one person contributed to it.

Evidence of fault may include the location of vehicle damage, photographs from the scene, witness accounts, traffic signals, video footage, and other information showing how the crash occurred.

The insurance adjuster's determination is important to the claim process, but it is not necessarily the final legal determination of fault. If you disagree with the insurer's conclusion, additional evidence or legal action may be used to challenge it.

What Can You Recover in a Third-Party Insurance Claim?

The compensation available depends on the nature of the accident, your injuries, your financial losses, available coverage, and other circumstances.

A third-party injury claim may include compensation for:

• Medical expenses: Hospital care, physician visits, rehabilitation, medication, and other reasonable injury-related treatment.
• Lost income: Wages or other earnings lost because your injuries prevented you from working.
• Property damage: Repair or replacement costs for a vehicle or other damaged property, subject to the circumstances and available coverage.
• Pain and suffering: Physical pain and other non-economic effects caused by the injuries.
• Future losses: In serious cases, reasonably supported future medical expenses or loss of earning capacity may also be relevant.

The amount claimed should be supported by evidence. Medical records, bills, employment documentation, photographs, repair estimates, and other records can help establish the extent of your losses.

How Do You File a Third-Party Insurance Claim?

Filing a third-party claim starts with identifying the responsible party and the appropriate insurance company. You then notify the insurer of the accident and provide the information necessary for it to investigate.

Get the Other Driver's Information

After a collision, obtain the other driver's name, contact information, insurer, and policy information when possible. You should also record identifying information about the vehicles involved.

Document the Accident

Preserve evidence from the scene if you can safely do so. Take photographs of vehicle damage, road conditions, traffic signs, skid marks, and other relevant details.

Obtain contact information from witnesses as well. Independent witnesses can be useful when drivers disagree about how the accident occurred.

Obtain the Police Report

A police report can contain information about the drivers, vehicles, witnesses, location, and circumstances of the crash. It can therefore be useful when preparing the insurance claim.

Notify the Insurer

You can notify the at-fault driver's insurance company that you are making a third-party claim. The insurer will typically assign a claim number and an adjuster.

You should also notify your own insurer as required by your policy. Your coverage could become relevant depending on how the third-party claim develops.

What Should You Know About Third-Party Insurance Claims?

Third-party insurance claims allow you to seek compensation from another person's liability insurer when that person's negligence causes your injuries or property damage. After an Illinois car accident, the process generally involves establishing who caused the collision, documenting your damages, submitting the claim, and negotiating with the responsible driver's insurer.

The key difference from a first-party claim is that you are dealing with an insurance company with which you do not hold the policy. The insurer will independently investigate liability and damages before deciding whether to pay your claim and how much to offer.

A car accident lawyer can evaluate the evidence, communicate with the insurer, assess a settlement offer, and determine what options remain when a third-party claim cannot be resolved through negotiation. If you need help with a third-party insurance claim after an Illinois accident, call Strong Law Offices at 309-393-2928 to discuss your claim and the options available for pursuing compensation.