What defines a first-party claim?

A first-party claim is defined as a claim made by a policyholder on their own policy. This type of claim typically involves the insured seeking coverage for losses or damages to their own property or personal injuries under their own insurance policy. For example, if a homeowner experiences damage to their home due to a fire, they would file a first-party claim with their homeowners’ insurance to recover expenses related to the repairs and related losses.

The key aspect that distinguishes a first-party claim from other types of claims is that it involves the insured directly seeking benefits from their own coverage rather than from a third party or another insurer. This is important as it outlines the relationship and rights granted to policyholders under their policies, a fundamental principle in insurance contracts.