Glossary

Third-party claim

A claim you make against another driver's insurance for damage or injuries that driver caused, rather than against your own policy.

Also called: liability claim, claim against the other driver

A third-party claim is a claim filed with someone else's insurer. In an insurance contract, the first party is the policyholder, the second party is the insurer, and the third party is anyone outside the contract who is harmed by the policyholder. If another driver causes a crash and you seek payment from their liability coverage, you are the third-party claimant.

The at-fault driver's insurer owes its main duties to its own customer, not to you. Its claims adjuster will investigate fault, and you must show the other driver was responsible and document your damages: repair estimates, rental costs, medical bills and lost wages. Payment is capped by the other driver's liability limits and, in most states, reduced by your share of fault. Example: your damages are $10,000 and you are found 20% at fault, so the other insurer offers $8,000 (hypothetical figures).

You can instead file a first-party claim with your own insurer under collision coverage. That is often faster, because your insurer owes you service under your contract, and it can recover the money, including your deductible, from the other insurer through subrogation. A third-party claim may be the only route if you have no collision coverage. Before signing any release, make sure your injuries are fully known. See first-party vs third-party claims.

Last reviewed October 4, 2026

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Related terms

First-party claim A claim you make under your own insurance policy, such as collision, comprehensive, PIP or uninsured motorist coverage. Liability coverage The part of a car insurance policy that pays for injuries and property damage you cause to others, plus your legal defense, up to your limits. Claims adjuster The insurance company employee or contractor who investigates a claim, decides what the policy covers and sets how much is paid. Subrogation An insurer's right, after paying your claim, to recover that money from the party who caused the loss, often getting your deductible back too. Release of liability A document an injured person signs to accept a settlement and give up further claims against the at-fault party for that accident. Diminished value The resale value a car loses after a crash, even when fully repaired, because buyers pay less for a car with an accident history.

Related guides

Aftermarket vs OEM parts in insurance repairs Why insurers write estimates with aftermarket, recycled or reconditioned parts, whether they are safe, what the rules say, and how to get factory parts. Insurance bad faith explained What counts as insurer bad faith, how first-party and third-party claims differ, the state laws behind them, and what to do if your claim is mishandled. Comparative vs contributory negligence How states split blame for a crash, from contributory negligence to pure and modified comparative fault, with a state-by-state list and worked examples. Diminished value claims Why a repaired car can be worth less after a crash, when you can claim that loss from the at-fault driver's insurer, and how to document the claim. Do you pay a deductible if the accident was not your fault? No deductible if the other driver's insurer pays; you pay it upfront if you use your own collision coverage, then get it back through subrogation. First-party vs third-party claims The difference between claiming on your own policy and claiming against the at-fault driver's insurer, and how to choose when the other driver caused the crash.

Related tools

Should I file a claim? calculator Compare what an insurance claim would pay with what a possible premium increase could cost over the following years, using your own numbers.