Types of Claims

I was involved in an Accident. What do I do?

There a 2 types of claims and here are your options:

  • First Party Claims
  • Third Part Claims
  • Your Right to Appraisal, aka Your Appraisal Clause

A first-party insurance claim is between you the policyholder (you the first party) and your insurance company (the second party). These are contractual claims that are contingent on the specific language of the insurance policy because you are in a signed contract with them.

In a third-party insurance claim, there are three parties. The first party is the person that is responsible to indemnify you for the loss or damage to your vehicle, and the second party is the first parties insurance company since they are in contract with the first party to pay for the damage incurred by the first party. The third party is the one who was in the accident who is not at fault and where the first party is taking responsibility to make the third party whole. i.e. Someone else other that you or your insurance company is taking care of the damage that needs to be repaired on your vehicle when someone hit you and it was their fault.

For more information about First-Party Insurance Claims and Third- Party Insurance Claims, please keep reading! Dents and Dings has you covered with your collision service questions and needs, so please do not hesitate to reach out with your questions or concerns.

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What Is a First-Party Insurance Claim?

A first-party insurance claim is between you the policyholder (you the first party) and your insurance company (the second party). These are contractual claims that are contingent on the specific language of the insurance policy because you are in a signed contract with them.

Example: First party claims are when you filed a claim to use your insurance company to pay for the repair your vehicle.

Even though your insurance company is contractually obligated to repair your vehicle to pre-loss condition more often times than not your insurance company will try to only pay for subpar repairs and ignore the fact that they have an obligation to repair your vehicle to the same or better than it was before the accident.

Since so many insurance companies are electing to pay for just enough of a repair to get by or try to steer you to one of their direct repair shops (DRP's) since they have a contract with that repair shop they can pressure the shop on what they will pay and what they won't pay. Whose best interest do you think the repair facility has in mind when they are working on your vehicle and the collision repair facility knows that they won't be compensated for some repairs that need to be performed for safe and proper repairs? You or the One who steers work their way? So what can you do when your insurance company doesn't have your best interest in mind besides looking for another insurance company? Well, you get your automobile policy that tells you everything about what your insurance will cover. (If you didn't receive this booklet when you signed up for your insurance then contact your insurance company and tell them that you need a copy of you Declarations Page (Dec page for short) and look in the index to see if you have a spot that says "Appraisal". If you do, which most insurance do, except in our area as of 2021 where State Farm removed the Appraisal Clause from their policy and AutoOwners insurance never instituted it) go the page that the Appraisal clause is on in your policy and it will state: (The Actual Appraisal Clause language from a South Carolina auto insurance policy)

APPRAISAL:

A. If we and you do not agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will select a competent and impartial appraiser within 20 days after receiving the written request from the other. The two appraisers will select an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the actual cash value and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:

Pay its chosen appraiser; and

Bear the expenses of the appraisal and umpire equally.

B. We do not waive any of our rights under this policy by agreeing to an appraisal.

The “Appraisal Clause” was designed to establish a procedure to allow disputed amounts to be resolved by independent, impartial and disinterested parties; in a fair and equitable manner, without legal activities and the associated costs and time which are commonly excessive and additionally burdensome.

The “Appraisal Clause”, as oftentimes found within an insurance policy contract, is straightforward and binding (both parties are bound by the final award). Lawyers are not required and the length of the process is governed by the complexity of the loss and/or policy terms and conditions. The result of the “Appraisal Clause” is somewhat less formal than arbitration or mediation and is far less costly and time consuming than litigation.

To begin, each party (“principal”) seeks and appoints an independent (disinterested) and impartial Appraiser. From that point forward the principals are no longer involved in the dispute resolution as each Appraiser must independently assess the loss related damages and attempt to reach a consensus with the other Appraiser for a reasonable and equitable resolution and/or settlement.

Should the two independent Appraisers fail to reach an agreement, they will then submit their findings to a chosen Umpire; who (depending upon the terms within the policy/agreement) was either selected to, or after the Appraiser’s unsuccessful efforts to resolve the dispute.

An independent and disinterested Umpire, selected and agreed upon by the two appraisers, will then review the information prepared and submitted by the two Independent appraisers and render his or her final decision; a decision which is binding upon the participating parties.

To be an effective umpire, the umpire must also be impartial, willing to listen, ask questions, perform limited research and be of good moral character and reputation. An Umpire who has a vested, undisclosed interest or reward must be avoided or disqualified at all costs. The most difficult aspect of the “Appraisal Clause” is ensuring that each party’s chosen Independent Appraiser is truly independent, unbiased and disinterested and knowledgeable about safe and proper repairs.

The spirit of the “Appraisal Clause” is to resolve disputes fairly and to do so in a timely and cost effective manner. Through the “Appraisal Clause“, disputes can be resolved relatively quickly, economically, equitably and amicably when compared to mediation, arbitration and litigation.

What Is a Third-Party Insurance Claim?

In a third-party insurance claim, there are three parties. The first party is the person that is responsible to indemnify you for the loss or damage to your vehicle, and the second party is the first parties insurance company since they are in contract with the first party to pay for the damage incurred by the first party. The third party is the one who was in the accident who is not at fault and where the first party is taking responsibility to make the third party whole. i.e. Someone else other that you or your insurance company is taking care of the damage that needs to be repaired on your vehicle when someone hit you and it was their fault.

In this case, because there is no contract between the insurance company and the injured passenger (i.e., a third party), the passenger is entitled to make claims for things that may not be covered under the insurance policy. These are generally things such as medical expenses, loss of wages, and compensation for pain and suffering. A third-party claim is commonly referred to as a liability claim because someone else is liable for the injuries suffered by the third party. If the insurance company is unable or unwilling to settle with the injured third party, the third party can bring the liability claim to the at fault person(s).

The Downside to a third party claim is that the at faults insurance company is not in a contractual obligation to you and can take it upon themselves to try to tell you what they will or will not pay for because they know that most people don't have the funds or the resources to take them to court. Well, we have an answer for that also if you are is South Carolina, and it only will cost you $10.00. (Other states may have something similar)

Auto Insurance Arbitration

Resolving disputed property damage liability claims

What is Arbitration?

Automobile insurance arbitration involves the settlement of a dispute over a property damage liability claim by a person or persons chosen to hear both sides and come to a decision. Any person who is a party to a disputed automobile property damage liability claim may submit the claim for settlement through arbitration.

Arbitration can decide the amount of damages involved in the claim and who is responsible to pay for the damages.

Arbitration cannot be used to settle a claim against your insurance company that involes collision or comprehensive coverages. Likesize, bodily injury claims are not handled through this process.

Process for Arbitration

The claim should be filed in the Clerk of Court's Office in the county you reside, or where the accident happened; you must complete the required forms and pay a $10 fee. Remember, you are filing to arbitrate against the at-fault party, not the insurance company.

The Clerk of Court will either appoint three attorneys to serve as the arbitration panel, or if both parties agree, one attorney.

A date will be set for the hearing. Damages must be awarded as provided by law including, but not limited to, actual damages, loss of use, depreciation and damages to property other than vehicles (personal property contained in the vehicle).

If you have further questions, please contact the Clerk of Court that has jurisdiction over the hearing.

You may also contact the Office of Consumer Services of the SCDOI at any time for assistance.

Toll-free: 1-800-768-3467

Email: consumer@doi.sc.gov