First-Party Insurers

Claims made by an auto accident injury victim against his/her own insurance policy are considered “first-party” claims.  These may include injury claims under uninsured motorist or underinsured motorist coverage, medical expenses under med-pay coverage for reimbursement of doctors’ bills, and/or property damage claims under collision coverage or comprehensive coverage.  Depending upon the circumstances of the accident, there may be one, two, or even more policies that may be available for providing these types of coverages.

To maximize the benefit to an injury victim, it’s essential to thoroughly research and identify all the insurance policies that might provide coverage in that victim’s particular situation.

The first place to look for first-party coverage in a motor vehicle accident case is toward the owner of the vehicle in which the injury victim was a driver or passenger.  All vehicles in California are required to have basic minimum liability insurance policies – proof of this minimum coverage has to be supplied to the DMV annually when we register our vehicles.  So in every accident, there at least should be an insurance policy in place for the car in which an injury victim was present.  Unfortunately, however, there is no legal requirement to have uninsured motorist or medical payments coverage with these insurance policies, and many folks may try to save a little money on their insurance bills by skipping these “optional” coverages.  (There is, however, a requirement that a policyholder waives this coverage in writing – something the insurance agent occasionally forgets to do.)  These two coverages, especially uninsured motorist coverage, are actually among the “best buys” in auto insurance – they are relatively inexpensive compared with the liability coverage that is required, and they directly benefit you and your passengers if someone who is uninsured or inadequately insured injures you.

If the owner of the vehicle in which an injury victim was present has medical payments coverage, then this type of first-party coverage will provide payments for each and every injured person in that vehicle up to the individual limits.

Likewise, if the vehicle owner has uninsured motorist coverage on the vehicle’s policy, then this coverage is available to each injured person in the vehicle up to the per person and per accident policy limits if their injury was caused by an uninsured motorist.

Even though these coverages may be extended to people who are not actually named on the insurance policy, these are still handled as first-party claims with these folks being “beneficiaries” of the insurance contract.

Sometimes a person may be injured in a motor vehicle accident while they are driving or are passengers in a vehicle owned by another person.  Typically, in these cases, the insurance coverage of the vehicle owner kicks in first – is considered “primary” -- but the individual policies of the non-owner driver or passenger may also provide additional coverage above and beyond what the vehicle owner’s policy offers.

This may vary from one insurance contract to another, so it’s a good idea to familiarize yourself with your own insurance policy limitations in this regard.

Policies of uninsured motorist coverage (and underinsured) can also provide coverage for “resident relatives.”  Insurance policies will have specifically named individuals – or “named insureds” -- listed in the policy itself.  This would be the vehicle owner and typically – though certainly not always -- the owner’s spouse and the owner’s resident children who are old enough to drive.

Uninsured motorist coverage will typically also extend to relatives who reside with the policyholder but are not named insureds in the policy.  The term for these folks is “resident relatives,” and this category may be specifically limited by the insurance policy languages.  (Again, read your policy.)  And be aware that “resident” doesn’t necessarily mean living with the vehicle owner at the present time or even most of the time.  A college student away at school who still maintains their “residence” with their parents, for example, may qualify as a “resident relative.”

One interesting point of uninsured motorist coverage is that it covers injuries to the “insureds” named in the policy that are caused by “uninsured motorists” but doesn’t require that the injury victim is in a motor vehicle when the injury occurs.  So if you happen to be struck and injured by an uninsured motorist while you are riding a bicycle or walking as a pedestrian, you may be able to pursue a claim under your uninsured motorist coverage.

In addition to auto insurance policies, there are a variety of other types of insurance that may come into play in accident injury situations.  Certainly, the most obvious of these is health insurance, which hopefully will be available to cover all or most of a victim’s medical expenses.  Injury victims who have both health insurance and medical payments coverage under an auto insurance policy should take care as to which bills to submit to which coverage.  In general, medical payments coverage is best used to cover bills that health insurance doesn’t cover or which may become direct out-of-pocket costs to the injury victim, like co-pays and deductibles.  It’s also helpful to reserve medical payments coverage for treatment that may be desired, but that’s not covered by health insurance, or that’s with an out-of-plan doctor.

Another type of coverage is disability insurance, which comes in a few different varieties.  State disability insurance (SDI) is something we pay for as a payroll deduction, and in California is generally available for either 39 weeks or 52 weeks, depending on employment status.  SDI is usually processed fairly quickly, based upon reports from the injury victim’s doctor.  Social Security Disability Insurance may be available for injury victims who are permanently disabled from work due to serious injuries.  SSDI can sometimes take much longer to process and approve, occasionally one or two years.  In addition to the state SDI program and the federal SSDI program, there are also private disability insurance policies – both short-term and long-term – that may be provided by an injury victim’s employer or which some folks will directly purchase on their own.

To maximize the bottom-line benefit for clients, an experienced personal injury attorney will work diligently to identify any and all first-party insurance coverages that may apply in each case.  In addition to simply identifying the coverages, it’s also necessary to understand how they may interact with each other – for example, which bills to submit to health insurance versus medical payments coverage to provide the maximum economic benefit to the client.

Additionally, many of these other insurance companies and government programs will have the legal right to be reimbursed for some or all the benefits paid on an injury victim’s behalf when that victim receives funds from a settlement or verdict.  Most health insurance – both private health insurance plans and government programs like Medicare and Medi-Cal – will assert reimbursement rights from personal injury settlements.  Knowing which of these must be paid, which routinely assert more reimbursement rights than they actually have legally, and which can be negotiated into a reduced payment or a complete payment waiver is a key service that an experienced personal injury attorney will provide to clients.

For information on the coverages you may have on your automobile insurance policy and the different types of claims under those coverages, check out:

• Collision 
• Comprehensive
• Gap 
• Liability
• Medical payments (med-pay)
• Umbrella insurance
• Uninsured motorist (UM)
• Underinsured motorist (UIM)

To learn about insurance companies and their claim tactics, see:

• How an Injury Attorney Deals with Insurance Company Tactics
• Insurance Industry and Individual Companies: Hugely Profitable
• Dirty Tricks Insurance Companies Play in Accident Claims 

Photo by Gabrielle Henderson on Unsplash

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