What occurs when the policyholder has sustained the loss and usually settles quickly?

The correct answer is A. first-party claim. A first-party claim (A) occurs when the policyholder themselves has suffered a loss and files a claim directly with their own insurance company - because the insured and the insurer are the two parties to the contract, these claims tend to settle quickly since there's a direct…

Question

Options

Afirst-party claim
Bsecond-party claim
Creopened claim liability
Dpersistent coverage

How the community answered

(52 responses)

A
77% (40)
B
13% (7)
C
2% (1)
D
8% (4)

Explanation

A first-party claim (A) occurs when the policyholder themselves has suffered a loss and files a claim directly with their own insurance company - because the insured and the insurer are the two parties to the contract, these claims tend to settle quickly since there's a direct relationship with no adversarial third party involved.

B (second-party claim) is not a standard insurance term - in contract law, the "second party" is the insurer itself, so this phrasing doesn't describe a claim type. C (reopened claim liability) refers to a previously closed claim being revisited, which is the opposite of a quick settlement. D (persistent coverage) is not a recognized claims term at all and describes an ongoing policy feature, not a claims process.

Memory tip: Think "first-party = my party" - the policyholder is filing against their own policy, so there's no dispute about whose fault it is, making resolution faster.

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