If you have been involved in a Michigan car wreck, then you may have heard such terms as “first-party” claim or “third party” claim. These phrases can be confusing. This article provides a basic explanation of what these claims are and what they mean.
A first-party claim is made by a person against an insurance carrier for Michigan no-fault benefits. If you are a policyholder, then you make the claim against your own insurance company. These claims are contractual, meaning they arise out of the contract – insurance policy – between the policyholder and the insurance company.
Because Michigan is a no-fault state, an individual can make a first-party claim even if they caused the car wreck.
First party claims usually involve the payment by the insurance company of medical expenses, wage loss benefits, replacement services and other benefits. Under Michigan law, there is no time or dollar limit for medical expenses. This means the applicable insurance company responsible for paying first-party benefits must pay all medical expenses for life so long as the treatment is related to the car accident.
An important thing to know if that the first-party insurance company is not responsible for paying pain and suffering. This type of compensation is paid through a third-party claim.
A third-party claim is made by an injured person against the at-fault driver for causing the accident. Usually the at-fault driver is defended by a representative from his insurance company. Unlike a first-party claim, which is contractual, a third-party claim is based on tort and is a standard negligence case.
Under Michigan law, a person can only bring a third-party claim if the other driver is at least 50% at-fault for causing the accident. This is called liability.
Besides claiming compensation for pain and suffering, an individual may claim excess wage loss (wage loss that is above the statutory maximum or extends beyond 3 years) in a third-party claim.
Very often, an individual injured in a car accident may be able to make both a first-party and third-party claim for compensation. These claims can be bundled together in one lawsuit, thereby saving time and litigation costs.
If you have any questions about first-party or third-party claims, please call us at 1-800-LEE-FREE (1-800-533-3733). Our experienced and dedicated team of Michigan trial lawyers is waiting to answer your questions.