In first-party situations, you – the policyholder – make a claim to your own insurance company. You have signed a contract with your company, and your compensation is dependent on what is in that contract. For example, if your home suffers fire damage, you can make a claim to your insurance company to cover the cost of damages and repairs. The amount you will receive depends on your policy.

In third-party claims, you file the claim with someone else’s insurance. Liability claims are the most common type of third-party claims. Because no contract exists between you and the insurance company, you may make claims for expenses that aren’t covered in the policy. For example, in some states, if you are in a traffic accident but not at fault, you may file a claim with the other driver's insurance company - requesting compensation for loss of wages or pain and suffering.

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