First-Party vs. Third-Party Insurance Claims Explained

First-party claims

You claim under your own coverage, such as collision or comprehensive, and you usually pay your deductible. Your policy is a contract, so its terms control. Most auto policies include an appraisal clause that lets you resolve a disagreement over the amount of loss. Most policies also exclude diminished value on your own claim.

Third-party claims

You claim against the at-fault driver's liability coverage. There's no deductible, but you don't have a contract with that insurer, so your own policy's appraisal clause doesn't apply. Diminished value is generally recoverable here, since Virginia courts allow repair cost plus remaining loss in market value (Averett v. Shircliff, 1977).

Which should you choose?

Sometimes your own insurer pays first and recovers from the other insurer later. Virginia regulations say that when liability is reasonably clear, an insurer shall not recommend that a third-party claimant make a claim under their own policy solely to avoid paying (14VAC5-400-80). Your deductible should be included in your insurer's recovery demand.

Where Geoff helps

On first-party claims, Geoff can serve as your appraiser under the appraisal clause. On third-party claims, he can document repair cost disputes and diminished value.

Three sides to every claim. I've worked all of them. Geoffrey C. Albach has spent 33 years in the industry as an independent appraiser, a former insurance staff adjuster, and a collision repair operations director.

By Geoffrey C. Albach, independent auto damage appraiser · About Geoff

Related guides: Virginia's appraisal clause · Diminished value claims in Virginia · What to Do After a Car Accident in Virginia: Claim Steps · All guides

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