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📝 '''First-party claim''' is a claim filed by a [[Definition:Policyholder | policyholder]] directly under their own [[Definition:Insurance policy | insurance policy]] for a loss they themselves have suffered, as opposed to a [[Definition:Third-party claim | third-party claim]], where someone else seeks compensation from the policyholder's [[Definition:Liability insurance | liability coverage]]. Common examples include a homeowner claiming for fire damage under a [[Definition:Homeowners insurance | homeowners policy]], a driver seeking vehicle repairs under their own [[Definition:Collision coverage | collision coverage]], or a business filing for lost income under a [[Definition:Business interruption insurance | business interruption]] endorsement. The defining characteristic is that the insured and the claimant are the same party.

⚙️ Processing a first-party claim begins when the policyholder provides notice of loss to the [[Definition:Insurance carrier | carrier]] or its [[Definition:Third-party administrator (TPA) | third-party administrator]]. An [[Definition:Adjuster | adjuster]] — whether staff, independent, or [[Definition:Public adjuster | public]] — inspects the damage, reviews the policy's [[Definition:Coverage | coverage]] terms, applies any relevant [[Definition:Deductible | deductible]], and determines the [[Definition:Indemnity | indemnity]] owed. Because the insurer's contractual obligation runs directly to its own customer, the claims-handling standards are shaped by [[Definition:Duty of good faith | good faith]] requirements and state [[Definition:Unfair claims settlement practices | unfair claims settlement practices]] statutes. Delays, lowball offers, or unreasonable denials can expose the carrier to [[Definition:Bad faith | bad faith]] litigation, which in many jurisdictions carries punitive damages far exceeding the original claim value.

💡 Understanding the first-party versus third-party distinction is essential for everyone from [[Definition:Underwriter | underwriters]] pricing coverage to [[Definition:Claims examiner | claims examiners]] setting [[Definition:Loss reserve | reserves]]. First-party claims tend to be reported more quickly and resolved more predictably than liability claims because the insured has a direct incentive to cooperate and the factual investigation is usually simpler — the question is the extent of the loss, not who caused it. That said, first-party lines are not without complexity: disputes over [[Definition:Valuation | valuation]] methodology, [[Definition:Policy condition | policy conditions]] like proof-of-loss requirements, and the applicability of [[Definition:Exclusion | exclusions]] (such as wear-and-tear or earth-movement clauses) generate substantial litigation volume and drive a significant portion of carrier [[Definition:Loss adjustment expense (LAE) | loss adjustment expenses]].

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Third-party claim]]
* [[Definition:Claims handling]]
* [[Definition:Bad faith]]
* [[Definition:Deductible]]
* [[Definition:Loss adjustment expense (LAE)]]
* [[Definition:Duty of good faith]]
{{Div col end}}

Definition:First-party claim - Revision history

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