Dealing with Insurance Companies Flashcards

What is the difference between a 'first-party' and 'third-party' insurance claim after an accident?

Answer: First-party is a claim against your own insurer; third-party is against the at-fault driver's insurer

A first-party claim is filed under your own policy, while a third-party claim is filed against the insurance of the driver who caused the accident.

When can you sue the at-fault driver's insurance company directly?

Answer: Generally you cannot sue the insurer directly; you sue the at-fault driver instead

In most states, you sue the negligent driver, and their insurer defends the case and pays any judgment up to policy limits.

What is 'med-pay' (medical payments) coverage in an auto insurance policy?

Answer: Coverage that pays your medical expenses regardless of fault

Med-pay coverage reimburses your medical expenses up to policy limits regardless of who caused the accident.

What should you do if the at-fault driver was uninsured at the time of the accident?

Answer: File an uninsured motorist (UM) claim with your own insurance company

Uninsured motorist coverage in your own policy provides compensation when the at-fault driver has no insurance.

What is an insurance company's duty to defend in an accident lawsuit?

Answer: The obligation to provide legal defense to its insured against covered claims

The duty to defend requires the insurer to provide and pay for a lawyer to defend its insured against any covered claim, even if disputed.

How does PIP (Personal Injury Protection) coverage differ from liability coverage?

Answer: PIP pays your own medical bills and lost wages regardless of fault; liability covers damages you cause to others

PIP is no-fault coverage that pays your own losses quickly, while liability coverage compensates others when you are at fault.