A first-party claim is when you make a claim for your own loss under your own policy, like using your collision coverage to fix your car. In liability, we deal with third-party claims. Here, you are the “first party,“ your insurer is the “second party,“ and the person making the claim against you is the “third party.“ Your insurance handles the third party’s claim for damages they allege you caused. The insurer pays them directly if you are found liable, protecting your personal finances.

Fault is determined by investigating which driver failed to exercise reasonable care, violating traffic laws or acting negligently. Police reports, witness statements, photos, and traffic camera footage are key evidence. Insurance adjusters analyze this evidence against local rules, which may follow “comparative negligence” (shared fault) or “contributory negligence” (barring recovery if even slightly at fault). The goal is to establish who caused the accident by not driving safely. Your own detailed notes and evidence collected at the scene are crucial for supporting your version of events.

Saying no means proceeding to trial, which carries significant uncertainty. Juries are unpredictable. You risk getting nothing or a lower award. Also, consider the additional time (often years), stress, and upfront costs of a trial. If you lose, you typically owe nothing, but you also recover nothing. The settlement offer provides guaranteed, immediate closure, which has substantial value you must factor in.