Even the most careful driver can end up in a car accident. Even when injuries aren't all that serious, the crash (and the aftermath) can be a frustrating experience, especially when you weren't at fault. Luckily, when those involved in the accident are covered by car insurance, you typically have options for getting compensation for your losses. After an accident where you weren’t at fault, you might consider filing a third party car insurance claim.
Third Party Car Insurance Claim Basics
A third party car insurance claim is one that an individual files with someone else’s car insurance company. This is usually the insurance company of the driver who was at fault for the car accident. In contrast, a first party car insurance claim is one that the insurance company receives from its own policyholder. To help illustrate the difference, let’s look at an example.
Two drivers, Robert and Brittany, are involved in a rear-end car accident. Robert, the tailing driver, is 100% at fault because he was texting while he was driving, and didn't notice that Brittany had stopped at a four-way stop sign. As a result of the accident, Robert and Brittany both suffer minor injuries. Assuming both drivers have insurance, each driver will look to one policy or another to pay for vehicle repairs and medical bills.
Since Brittany was not at fault for the accident, she can file an insurance claim with Robert’s insurance company instead of going through her own carrier. She might do this so she can avoid a claim on her car insurance history, and/or to avoid paying a deductible. In this situation, Brittany’s insurance claim is an example of a third party car insurance claim.
Robert, on the other hand, will be filing a car insurance claim with his own insurance company, since he was the one responsible for causing the accident. Robert’s claim is a first party car insurance claim because he is the policyholder or “first party” to his insurance policy. (In case you were wondering, the car insurance company is the “second party” with respect to Robert and Brittany.)
Of course, this example makes several assumptions. One is that it's easy to determine who was at fault for the accident (it's not usually that simple), and the other is that the accident took place in a "fault" state, as opposed to a no-fault state.
At-Fault Versus No-Fault
Each state has its own laws and rules governing car insurance. Most states follow a fault-based system (also known as "tort"-based), which means the driver who caused the accident (or that driver’s insurance company) is on the financial hook for the losses of others who were injured or incurred property damage as a result of the crash.
A minority of states follow a "no-fault" system (either mandatory or optional). This means, after a car accident, each driver will file an injury claim with their own insurance company, regardless of who was responsible for causing the crash. In these states, it's not possible to file a third party car insurance claim with the other driver's coverage (or file a personal injury lawsuit against the at-fault driver him/herself) unless the circumstances meet the state's specific statutory threshold for stepping outside of the no-fault system. That means either the car accident injuries qualify as "serious injuries" as defined by the state's standards, or that the resulting medical bills exceeded a certain dollar amount.
Let’s go back to the accident involving Robert and Brittany. If the accident happened in a no-fault state, Brittany would have filed her injury claim with her own car insurance company, not Robert’s, unless the seriousness of her injuries allow her to step outside the no-fault system in her state. It's also important to note that no-fault car insurance relates to injury claims, not claims for damage to a vehicle or other property.
Exceptions to Filing a Third Party Car Insurance Claim
Depending on the exact terms and provisions of your insurance policy, even if you’re in an at-fault car insurance state and didn’t cause the accident, you might still file a claim with your own car insurance company. There are two common situations where a policyholder may choose to do this.
In the first situation, the at-fault driver’s insurance company refuses to offer any car accident settlement, or offers a settlement amount that is unacceptably low. Since you are not required to accept the other insurance company’s offer, you could always file a claim with your own car insurance company, assuming you have coverage to do so.
In the second situation, the at-fault driver’s insurance company quickly pays out, but there isn't enough coverage to pay for all your injuries or damages. In this situation, you may seek additional payments from your own insurance company, but usually only if you have uninsured/underinsured motorist coverage. This coverage is usually purchased separately as an add-on, though in most states the insurer is required to at least offer it.
Learn more about how car insurance affects a car accident case.