What is the primary distinction between first-party and third-party claims?

The primary distinction between first-party and third-party claims lies in who is initiating the claim and who is being held responsible for the loss or damages. First-party claims are initiated by the insured individual or entity seeking compensation directly from their own insurance company for losses covered under their policy. This typically involves damages to their property, such as home or auto insurance claims.

On the other hand, third-party claims involve a situation where the insured is faced with a claim from another individual or entity who alleges that the insured is responsible for causing damage or injury. In this case, the third party is claiming against the insured’s insurance policy to receive compensation for their losses.

This fundamental difference highlights the relationship between the insured, the insurer, and the claimant. Understanding this distinction is crucial for independent adjusters, as it influences how claims are handled and the obligations that different parties have under the insurance policy.

The other choices suggest attributes or requirements that do not accurately capture the essential distinction between first-party and third-party claims, making them less relevant in this context.