A third-party claim is against the at-fault driver's liability insurance; a first-party claim is against your own policy for PIP, uninsured or underinsured motorist, collision, or medical payments benefits. Your own insurer owes you contract and statutory duties, and the other driver's insurer does not. Owsley Law Firm handles both sides of a crash claim.
Most people think of a car accident claim as one claim against one insurance company. In Texas it is usually several: a claim against the at-fault driver's liability coverage, and one or more claims under your own policy.
The difference is more than vocabulary. It decides who you must cooperate with, who owes you deadlines, whether you can sue the insurer directly, and in what order the money is paid. Getting the order right can mean the difference between a capped recovery and a full one.
What is a third-party claim?
A claim you make against someone else's liability insurance because their driver caused the crash.
When another driver causes a Texas crash, you claim against that driver's liability coverage. The insurer is evaluating whether to pay on behalf of its insured, and its contract duties run to its policyholder, not to you.
That is why you are not required to give that insurer a recorded statement, and why you generally cannot sue it for unfair claim handling. Insurance Code section 541.060(b) provides that the unfair settlement practices provisions do not give a cause of action to a third party asserting claims against an insured, consistent with Allstate Insurance Co. v. Watson (1994).
What is a first-party claim?
A claim under your own policy for benefits you paid for, such as PIP, UM/UIM, or collision.
Your insurer owes you the benefits in your contract. It also owes you statutory duties: prompt claim handling under Insurance Code chapter 542 and fair settlement practices under chapter 541, with remedies you can enforce in court.
The flip side is that you owe your insurer duties too, typically prompt notice, cooperation, and in some coverages, medical records or an examination. Read the duties section of your policy.
Does PIP pay even if I caused the crash?
Yes. PIP benefits are payable without regard to fault.
Insurance Code section 1952.155 provides that PIP benefits are payable regardless of who caused the collision and regardless of other sources such as health insurance. Every Texas auto liability policy must include PIP unless a named insured rejects it in writing (section 1952.152), and the required amount is at least $2,500 per person (section 1952.153).
PIP must be paid within 30 days after the insurer receives satisfactory proof of the claim (section 1952.156). In most cases your insurer cannot recover PIP payments from the at-fault driver (section 1952.155(b)), and the at-fault side does not get credit for them, with an exception for claims by a passenger against the driver of the car they rode in (section 1952.159).
When does my uninsured or underinsured coverage come in?
When the at-fault driver has no insurance, cannot be identified, or does not have enough coverage for your damages.
UM and UIM coverage are required in every Texas auto liability policy unless rejected in writing (Insurance Code section 1952.101). UIM pays what you are legally entitled to recover from the underinsured driver, up to your limit, reduced by what is recovered or recoverable from that driver's insurer (section 1952.106).
Coordination matters. Before you settle with the at-fault driver for their policy limits, notify your own insurer and follow your policy's requirements, so you do not jeopardize the UIM claim.
In what order should claims be made?
Usually all at once: report to your own insurer immediately, open the third-party claim, and use first-party coverage while liability is decided.
You can use PIP right away for medical bills and lost income, and collision to fix the car, without waiting for the other insurer to accept fault. The third-party claim continues in parallel.
When the at-fault policy is too small, the third-party claim is resolved first, up to its limits, and the UIM claim follows for the balance. A lawyer coordinates these steps so that releases and credits are handled correctly.
Why does the difference matter for my rights?
Because your remedies, deadlines, and leverage are different for each claim.
Against your own insurer, chapter 542 sets specific deadlines and adds 18 percent interest and attorney's fees for violations (section 542.060), and chapter 541 allows actual damages and up to three times that amount for knowing violations (section 541.152).
Against the other driver's insurer, the leverage is a lawsuit against its driver and, when damages exceed the limits, a properly drafted Stowers demand under G.A. Stowers Furniture Co. v. American Indemnity Co. (1929).
Which coverage pays what
| Coverage | Claim type | What it pays |
|---|---|---|
| At-fault driver's liability | Third party | Your injuries and property damage caused by their driver, up to limits |
| Personal injury protection (PIP) | First party | Medical bills and lost income regardless of fault, up to limit |
| Uninsured / underinsured motorist | First party | What an uninsured or underinsured at-fault driver should have paid, up to limits |
| Collision | First party | Repair or replacement of your car, minus deductible |
| Medical payments (if purchased) | First party | Medical expenses up to limit |
What evidence proves it
- Your full policy and declarations page, including any rejection forms
- The at-fault driver's insurer, policy number, and limits
- Claim numbers for every claim opened
- Medical bills and wage records for PIP
- Repair estimates for collision or property claims
- All correspondence with each insurer
Mistakes that cost people money
- Not reporting the crash to your own insurer because you were not at fault
- Skipping PIP because you have health insurance
- Settling with the at-fault driver without notifying your UIM carrier
- Giving the other driver's insurer the cooperation you owe your own
- Assuming you rejected UM or PIP without checking for a written rejection
Frequently asked questions
Is a first-party claim the same as a no-fault claim?
Texas is an at-fault state, but PIP works like no-fault coverage: it pays regardless of who caused the crash, up to its limit.
Will a PIP claim reduce my injury settlement?
Generally no. The at-fault side usually gets no credit for PIP you received, except in a passenger's claim against the driver of the car they were in (section 1952.159).
Can I make a UIM claim if I was a passenger?
Often yes, under the policy covering the car and sometimes your own household's policy. The policy language controls.
Do I need to tell my insurer if the crash was not my fault?
Yes. Your policy requires prompt notice, and you may need its PIP, UM, or collision coverage.
Can my own insurer raise my rates for a not-at-fault claim?
Texas has no statute guaranteeing rates stay flat after a not-at-fault claim. Ask your insurer how it handles them.
Who handles all these claims?
Owsley Law Firm coordinates the third-party and first-party claims together, with no fee unless the firm wins.
This page is general information about Texas law and is not legal or medical advice. Every case depends on its own facts. Contact the firm for a free review of yours.
Keep reading
Is Texas a no-fault state for car accidents?
What is PIP insurance in Texas and do I have it?
Texas PIP Coverage: Insurance Code 1952.152
Texas UM/UIM Coverage: Insurance Code 1952.101
Recorded Statements to Insurance Adjusters in Texas