In Nevada, drivers must have automobile liability insurance policies providing minimum coverage of $25,000 for bodily injury or death of one person in any one accident; $50,000 for bodily injury or death of two or more persons on any one accident; and $20,000 for property damage. Similarly, even though it is not technically required by law, homeowners usually carry insurance on their homes. If you own a business in Las Vegas and lease your space, you are likely required to maintain at least a $1,000,000 general liability policy for the premises.
There are many different insurance policies you might be familiar with, but all are either first-party or third-party policies. You may have heard the terms "first-party" and "third-party" related to insurance policies. These terms are contractual in nature since an insurance policy is simply a specific type of contract.
What Is a First-Party Insurance Claim?
First-party insurance is insurance that covers the losses of the person named on the policy. So, a first-party insurance claim is made by the policyholder (the first party) against the insurance company (the second party). Since insurance policies are contracts, claims are contingent on the specific language of the insurance policy. A typical example of a first-party personal injury claim is a car accident where the responsible party has insufficient insurance coverage. In that instance, the injured party will file a UIM claim with their own insurer.
Another example would be a homeowner who suffers fire damage to their home. In this case, the homeowner will file a claim with the insurance company to cover the damage and repairs. The insurance company will compensate the homeowner based on what is in the insurance policy.
What Is a Third-Party Insurance Claim?
Third-party insurance is purchased to protect a person against liability for damages or losses that they caused. The policyholder may be a company, an individual, or a group of individuals of a particular class (such as company employees, a person's family, or the occupants of a vehicle).
In a third-party insurance claim, there are three parties. The first party is the insured individual, the second party is the insurance company, and the third party is another individual. Therefore, a third-party insurance claim is made by someone who is neither the policyholder nor the insurance company. The most common type of third-party insurance claim is a liability claim. For example, if you cause an accident on the freeway and injure a passenger in the other vehicle, that passenger can be a third party who can file a claim against your insurance company.
In this case, because there is no contract between the insurance company and the injured passenger, the passenger is entitled to make claims for things that may not be covered under the insurance policy. These claims generally include medical expenses, loss of wages, and compensation for pain and suffering.
Can First Party Insurance Claimants File a Lawsuit?
Yes! Even though what is covered under a first-party insurance policy is specified in the contract, insurance companies do not always pay out everything they are required to by law. In the insurance industry, this is referred to as bad faith insurance practices.
Some examples of an insurance company acting in bad faith include:
Deceptive practices like failing to notify you of a claim filing deadline or failing to provide the paperwork required to file a claim
Delaying or denying compensation without a justifiable reason
Failing to acknowledge and reply to a claim promptly
Misrepresenting policy language
Failing to perform a proper and thorough investigation into the claim
Attempting to settle a claim for a less than reasonable amount
Failing to inform the insured of an appeals process
Failing to provide a reasonable explanation for a denied or underpaid claim
Requiring unnecessarily burdensome documentation to process a claim
Using threatening or harassing investigative methods to intimidate the claimant
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There are many other ways insurance companies act in bad faith to avoid paying out fair compensation. If your insurance company is engaging in bad faith practices, you are entitled to file a lawsuit. If you believe your insurance company is not complying with the terms of your insurance policy, contact a first-party insurance lawyer to learn about your legal options. At Cohan PLLC, we have helped clients receive fair compensation after their insurance company initially denied or underpaid their claim.
Chasen Cohan, Esq. is the founder of Cohan PLLC. Mr. Cohan is a licensed attorney who also possesses FINRA Series 7 (Registered Representative) and Series 63 (Uniform State Representative) licenses, state insurance licenses, and State Securities Registrations in Nevada, Missouri, and North Carolina. Mr. Cohan is admitted to practice law before the Nevada Bar, all Nevada State and Federal Courts, and the United States Court of Appeals for the Ninth Circuit.
Mr. Cohan’s representative clients have included: Wal-Mart Stores, Inc., Sam’s West, Inc., MGM Grand Resorts International, New York-New York Hotel & Casino, Mandalay Corp., The Treasure Island Hotel and Casino, The Cosmopolitan of Las Vegas, The Mirage Casino-Hotel, South Point Hotel & Casino, American Express, Barclays, US Bank, Wells Fargo, Citibank, and various life insurance companies and service providers.
Mr. Cohan is a Las Vegas native who graduated with honors from UCLA with a Bachelor of Arts degree in Political Science. Mr. Cohan received his Juris Doctorate from the University of Texas School of Law. During law school, Mr. Cohan served as a clerk for the Office of the Texas Attorney General and a Judicial Extern for United States District Court Judge James R. Nowlin.
Clients from global brands and middle-market companies to innovative startups and individuals trust Cohan PLLC to resolve their trickiest legal disputes. Whether that’s litigation in state or federal trial and appellate courts in Nevada; investigations and enforcement actions before government agencies; or mediation, arbitration, and regulatory agency proceedings. Cohan PLLC has litigated hundreds of millions in dollars of claims on behalf of corporate litigants. As a result of this experience, Cohan PLLC has been afforded the opportunity to selectively act as Plaintiff’s counsel on complex, personal injury matters.