What best describes a third-party claim?

A third-party claim is best defined as a claim made by anyone other than the policyholder. This means that in a third-party scenario, the individual filing the claim is not the one who purchased the insurance policy but rather someone who has suffered a loss or damage as a result of the actions of the insured party.

In practical terms, if an individual is involved in an accident caused by the policyholder, that individual can file a claim against the policyholder's insurance to seek compensation for their injuries or damages. This distinguishes it from first-party claims, which are initiated by the policyholder themselves for their own losses, as well as from claims that might involve specific family members or purely repair-related assessments. Understanding this distinction is crucial for adjusting claims and ensuring that all parties are appropriately represented according to insurance policies and state regulations.