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🏠 '''First-party insurance''' is coverage that pays benefits directly to the [[Definition:Policyholder | policyholder]] (or another named insured) for losses that the policyholder itself sustains, rather than for liability owed to a third party. [[Definition:Homeowners insurance | Homeowners insurance]] covering damage to the insured's own dwelling, [[Definition:Comprehensive auto insurance | comprehensive and collision auto coverage]] for the policyholder's vehicle, and [[Definition:Cyber insurance | cyber insurance]] provisions reimbursing a company for its own incident response costs all exemplify first-party coverage. The defining characteristic is that the insured is both the party suffering the loss and the party receiving the payment — no injured third party needs to assert a claim for the coverage to trigger.

🔧 Under a first-party policy, the [[Definition:Insured | insured]] reports a covered [[Definition:Loss | loss]] directly to its [[Definition:Insurance carrier | carrier]], and the carrier evaluates the claim against the policy's insuring agreements, [[Definition:Exclusion | exclusions]], [[Definition:Deductible | deductible]], and [[Definition:Limit of liability | limits]]. Payment typically corresponds to the actual cost of repair, replacement, or restoration, subject to valuation methods specified in the policy — [[Definition:Actual cash value (ACV) | actual cash value]], [[Definition:Replacement cost | replacement cost]], or agreed value. The claims process is generally bilateral: the insured submits proof of loss, and the carrier's [[Definition:Claims adjuster | adjuster]] verifies the damage and determines the payout. Disputes between the insured and the carrier over the amount owed are resolved through the policy's [[Definition:Appraisal clause | appraisal]] or dispute resolution provisions, rather than through litigation against a third party.

📋 Distinguishing first-party from [[Definition:Third-party insurance | third-party insurance]] is foundational to understanding how insurance products are structured, priced, and regulated. First-party coverage is driven by the insured's own asset values and exposure profile, so [[Definition:Underwriter | underwriters]] focus on property characteristics, geographic risk, and the insured's [[Definition:Loss history | loss history]] when rating the policy. Third-party coverages, by contrast, hinge on the insured's potential legal liability to others — a fundamentally different risk calculus. Many modern [[Definition:Insurance policy | policies]], especially commercial packages and [[Definition:Cyber insurance | cyber]] forms, bundle both first-party and third-party insuring agreements in a single contract, making it essential for [[Definition:Insurance broker | brokers]] and [[Definition:Risk management | risk managers]] to understand which sections respond to which types of loss.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Third-party insurance]]
* [[Definition:Property insurance]]
* [[Definition:Actual cash value (ACV)]]
* [[Definition:Replacement cost]]
* [[Definition:Deductible]]
* [[Definition:Cyber insurance]]
{{Div col end}}

Definition:First-party insurance - Revision history

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