Parties to a Claim

Parties to a Claim:

  1. First party – The policyholder 
  2. Second party – The Insurance company
  3. Third party – anyone else involved in the loss event.

Handling the Third-Party claim is an extremely important part of the work of the claims department:-

    a  Third party  – does not have a contractual relationship with the insurer and can have the following consequences:

  1. The Third Party must legally pursue their claim against the insured and not the insurer (which will indemnity client)
  2. In practice, the claim will likely be presented by the claimant or their representative 
  3. The Third Party may already be hostile, hence their expectation of service levels will be higher that the insured’s as     

          they suffered a loss through the insured’s negligence, they may also view the insurers as the insured’s agent.

  1. The Third Party may be more prone to exaggerate their claims.
  2. Not much pressure can be put on the insurer to respond quickly as the insurer owes no loyalty to the claimant.
  3. Conversely, a well-handled Third-Party Claim may win the claimant at renewal.
  4. When contributary negligence is involved, compensation will not be 100%.
  5. A Third Party will not be liable to pay an excess or a deductible.
  6. A Third Party will more likely use a solicitor, hence they will need to be recovered. Unless the claim size is too small.
  7. Third Part claims are liability claims and are usually more complex in nature.
  8. Given the Third Party’s final option is litigation, they are more prone to use this option if they are not managed