what is the difference between first party and third party claims 
in a first party claim the insurance company makes a payment directly to the insured person or business in a third party claim the payment is made to someone other than the insured or insurer this happens when the insured person is liable for damages if your homeowner s insurance repays you for a repair to your roof that s a first party claim but if it pays for the medical bills of someone who slipped on your front steps that s a third party claim the bottom linethird party insurance is a form of liability insurance that covers you when someone makes a claim against you for damages a common example of this is auto insurance which will pay another driver who is injured in an accident that you have caused another common type of third party insurance is for property damage third party insurance protects you against having to potentially pay thousands or tens of thousands of dollars in claims like other forms of insurance you may not need it but if you do it could save you extremely large amounts of money or even protect you from bankruptcy 