What Is First Party Insurance?

Weatherford attorneys need to know the difference between “first party” insurance and “third party” insurance. So do attorneys in Willow Park, Aledo, Springtown, Milsap, Brock, Hudson Oaks, and all places in Parker County.
A “first party” insurance policy usually involves insurance that provides policy benefits directly to the insured or beneficiary. The Texas Insurance Code, Section 541.051(2) defines “first party claim” as a claim “by an insured or a policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by the insurer directly to the insured or beneficiary.” These types of policies generally include health insurance, life insurance, disability insurance, homeowner’s property insurance, and commercial property insurance.
By contrast, “third party insurance” is usually liability insurance. This type of insurance is designed to insure against loss to third parties caused by the insured or another person covered by the policy. These types of policies include commercial general liability, homeowner’s liability, auto liability, and professional liability coverages.
Here are some “first party” insurance examples:
A) Auto Property Coverage – The standard Texas Auto Policy covers accidental loss or damage to the covered auto. (There are variations of this form) If an insured is involved in a single-car accident resulting in property damage to the insured vehicle, the insured possessing this type of coverage may submit a claim directly to their insurance company for payment of losses. There is much more also that may apply. An experienced Insurance Attorney can help with the different coverages that may apply.
B) Health Insurance – Health insurance refers to coverage for medical and hospital expenses and may be issued on an individual or group basis. An insured who requires health care may submit a claim directly to their insurance company.
C) Life Insurance – Life insurance includes insurance on the life of the insured as well as annuities. Following the insured’s death, the life insurer pays death benefits in accordance with the policy to the designated beneficiary.
D) Marine Insurance – Originally, “marine” insurance referred to personal property in transit. Today, the term is sometimes used to refer to personal property insurance that is not restricted to any particular location. Thus, jewelry is frequently insured by a policy of “inland marine” insurance. Insurance for ocean going vessels is referred to as “ocean marine insurance” and is one form of insurance within the broader term “marine insurance.”
E) Disability Insurance – The insurance industry uses the term “disability insurance” to refer to insurance against loss of income to an insured person by reason of disability caused by accident or sickness. Disability insurance may be written on a group or individual basis. Disability policies may be non-cancellable or guaranteed renewable. Disability benefits under some policies may be reduced by social security or unemployment benefits.
F) Title Insurance – Title insurance guarantees title to real estate or personal property against loss resulting from defective title or adverse claims. Typically, title insurance protects purchasers and lien holders against errors and incorrect searches by title searchers relating to title to real or personal property.
While it is not always the case, usually “third party” insurance is the other persons insurance, whereas “first party” insurance is usually your own insurance. An insurance law attorney can clarify when in doubt.