The Difference Between First-Party Suits and Third-Party Suits
Being in an automobile accident is obviously a stressful experience. Unfortunately, the stress doesn’t end once the police reports have been made and the vehicles have been towed. Usually, that is when the confusion of trying to sort out who is responsible for paying what comes into play. Many people who’ve been injured as a result of a motor vehicle accident think that they only have a potential lawsuit against their insurance company. Others believe that their only available legal action is to sue the at-fault driver. In Michigan, however, an injured party may have a legal claim against both.
In the No-Fault world, there are two distinct types of lawsuits, first-party and third-party. A first-party lawsuit is one that is filed by an injured party against their own insurance company. Under the Michigan No-Fault Act, an auto insurer is responsible for paying personal injury protection benefits to the injured person covered by the policy. Personal injury protection benefits can include lifetime medical expenses, replacement services expenses, wage loss, and mileage expenses. When an insurance company doesn’t pay these benefits on behalf of its insured following a motor vehicle accident, the insured may be able to file a lawsuit against the insurer under the Michigan No-Fault Act. In a first-party lawsuit, the plaintiff would be seeking those specific benefits he or she is entitled to that went unpaid and in order to recover, would have to provide proof that those benefits are owed. The bulk of the recovery in most first-party lawsuits is used to pay the plaintiff’s outstanding medical bills.
In a third-party lawsuit, an injured person sues the motorist that caused the accident. The Michigan No-Fault Act permits such lawsuits provided that the injured person wasn’t at-fault for the accident and their injuries meet certain criteria. An injury that does meet these criteria is known as a “threshold injury.” (For more information regarding threshold injuries, please see the blog post titled “Do you have a threshold injury?”) A plaintiff in a third-party lawsuit is generally seeking compensation for their pain and suffering. The bulk of the recovery in most of these types of lawsuits goes to the plaintiff. So, even in a “no-fault” state, fault is still a consideration when it comes to some legal actions.
The attorneys and staff at the Law Offices of Joumana Kayrouz can help you navigate the complexities involved in both first- and third-party lawsuits. If you’ve been injured and think you may have a possible claim against an auto insurer or an at-fault driver, contact us today at 248-557-3645.