When someone gets in an accident, one of our first thoughts is, “Whose fault was it?” The answer to that determines which type of claim is filed – each which can play out differently for the people involved.
There are two types of auto insurance claims. When you’re in an accident you will either file a claim with your insurance company or with the other party’s insurance company. If you file with your insurance company, you are a first-party claimant in a first-party claim. If the other party’s insurance assumes liability on their client’s behalf, you are a third-party claimant in a third-party claim.
If you file as a third party, that claim is actually a claim filed against the person who caused the accident, and their insurance is simply stepping in for them to pay the damages you are owed. Secondly, it is important to understand your rights in this situation, and not to let anyone take advantage of those rights. Being a third party claimant is different than filing with your own insurance, because you have no policy, or contract, with the person who caused the accident or their insurance company. Because of this, the insurance company can not dictate any of your decisions, from choosing a repair shop to choosing replacement parts or dictating how the repairs should be done.
In a first party claim, where you file a claim against your insurance company, the claim is governed by terms and agreements previously set forth in your policy. It is good to be aware of your policy’s vocabulary, for in some cases, it will state that the insurance company is allowed to mandate used parts for the repair or parts that are of “like kind and quality.” If your policy mentions “like kind and quality,” the insurance appraiser who inspects your vehicle’s damages will typically estimate damage cost according to used, reconditioned or aftermarket parts.
So, if the insurance company is insisting you take those parts that are of “like kind and quality,” what can you do? One option is to request proof from the insurance company that the parts being used are truly of like quality. Studies have proven that aftermarket parts are generally inferior with regard to their fit and finish, and because of this many shops do not warranty them. It is vital you understand your policy, as it outlines your rights, and it is ultimately up to you to make sure they are fulfilled.
Again, if you file a claim against the person responsible for causing the accident, you are not bound by any contract; therefore, the insurance company cannot dictate any of your decisions because you are not contractually obligated to abide by their terms. Your claim is against the person at fault. It is that person’s responsibility to pay for your damages, and their insurance company is obligated to indemnify them for the damages up to the limit of the policy. As a third party claimant, it is important to understand you are owed to the full extent of the damages you suffered and to be prepared to fight for those rights, as most insurance representatives will tell you differently. They are inclined to make you think that their company has the last say in decisions regarding your vehicle, when this couldn’t be further from the truth.