If you get hurt in a car accident, you may have to file a personal injury insurance claim against your own coverage, rather than against the other driver. A claim against your own insurance is referred to as a first-party claim. A claim against the other (at-fault) driver is referred to as a third-party claim.
If you live in a no-fault state or Puerto Rico, you don't have a choice. You must file a claim with your own insurance company.
In first-party personal injury claims, you can't get compensation for the pain and suffering or emotional distress you endured as a result of the accident. You're also prohibited from claiming punitive damages for intentional misconduct.
Filing a first-party claim is very similar to filing a third-party claim. The same actions apply, from the moment of the accident up to contacting the insurance company:
Your personal auto policy requires you to notify your insurance company after an accident. When you do, ask them to send you a follow-up letter confirming you've complied with the notification terms of your policy. Make sure they include the claim number for future reference.
Your insurance company will require you to give a statement about the accident. They will also ask you to sign releases of information so they can collect and review your medical records. If you are claiming lost wages, they'll want to access your employment records as well. You must cooperate to keep your claim moving.
Unlike a third-party claim, which can be adversarial, a first-party claim is designed to promote mutual cooperation between the insured and the insurer. That spirit of cooperation dictates you do what you can to help your insurance company resolve your claim.
Your insurance company has a legal duty to act in good faith. This means if you file a claim, and your insurance company gives you the run-around, or refuses to cooperate in what you believe to be a valid claim, they may be acting in bad faith.
If you think your insurance company is acting in bad faith, contact a personal injury attorney immediately. This circumstance requires an attorney's legal expertise.
In a customary first-party claim, punitive damages are not covered. This doesn't apply if you file a bad faith lawsuit against your insurance company. If you win, the court can not only force your insurance company to pay your rightful claim, it can also award a further amount as a penalty against the company for its bad behavior.
If a first-party insurance claim can't be settled, the next step does not have to be a lawsuit. Between a failed settlement negotiation and a lawsuit, your case can go to arbitration or mediation.
Arbitration and mediation, collectively known as alternative dispute resolution, or ADR, are other methods of settling your claim. If you and your insurance company are at a stalemate, you can ask them to participate in arbitration or mediation. In fact, many insurance contracts now include language requiring you to agree to arbitration in lieu of filing a lawsuit.
Insurance companies do not want to get involved in lawsuits with their insured. When faced with the possibility of a lawsuit, they'll likely agree to an alternate form of dispute resolution. If you and your insurance company agree to ADR, you can probably represent yourself.
Before purchasing an auto insurance policy, read every page carefully. Be especially aware of the language on the Declaration Page. Note if the amounts of No-fault and PIP benefits are limited, and by how much.
To ensure that you have enough coverage for an injury accident, you should decide if you need to purchase gap insurance or additional private medical insurance to cover those extra costs.
Learn more about first-party claims here.
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