Which party is responsible for paying a first party claim?

The responsibility for paying a first party claim falls to the insurer of the policyholder. In a first party claim situation, the policyholder is seeking coverage for their own loss or damage as outlined in their insurance policy. The insurer, which is the company that provides that policy, is obligated to evaluate the claim and if valid, compensate the policyholder for their covered losses according to the terms of the policy.

This arrangement is fundamental to how insurance works; it allows individuals and businesses to protect themselves from financial loss by transferring that risk to an insurer. The insurer assesses the claim, determines if it falls within the policy guidelines, and then issues payment directly to the policyholder for the covered loss. Other parties, like third parties or government agencies, do not hold the responsibility to cover these claims under the terms of a standard insurance policy.