Table of Contents
First party insurance is coverage that pays you directly, from your own policy, after a loss. It does not depend on proving another driver was at fault. Your insurer is the party on the hook. That is the core of the idea. In auto insurance, this includes collision, comprehensive, personal injury protection, medical payments, and uninsured motorist coverage.
Third party coverage works the opposite way. It pays someone else when you cause harm. Understanding first party insurance matters because it controls how fast you get paid after a crash. It also decides whether you wait months for another driver’s carrier to admit fault. For most drivers, first party insurance is the difference between a repair check in two weeks and a legal fight.
What First Party Insurance Covers on Your Auto Policy
The National Association of Insurance Commissioners defines a first party claimant as a person or entity asserting a right to payment under their own insurance contract. That definition is doing real work. It separates the claims you file with your insurer from the claims strangers file against you. Your liability limits, by contrast, exist to protect other people. For example, if you rear-end someone, your property damage liability pays their bumper. Your collision coverage pays yours.
Several coverages fall under the first party insurance umbrella. Collision pays for damage to your vehicle from an impact, regardless of fault. Comprehensive handles theft, hail, flood, fire, vandalism, and animal strikes. Personal injury protection, or PIP, pays your medical bills and often a share of lost wages. Medical payments coverage, usually called MedPay, pays medical costs only. Uninsured and underinsured motorist coverage pays you when the at-fault driver cannot.
Twelve states have historically required PIP: Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, and Utah. Minimum limits vary widely. Utah sets the floor at $3,000. Michigan and New York sit at $50,000. Florida’s PIP repeal took effect July 1, 2026, moving that state to an at-fault system with mandatory bodily injury liability. As a result, Florida drivers now lean harder on MedPay and health insurance. Pennsylvania requires at least $5,000 in first party medical benefits. Maine also mandates MedPay.
What First Party Insurance Costs and How Claims Get Paid
First party insurance is not free, but the pricing is often lower than drivers expect. In 2026, the average annual cost of comprehensive coverage runs about $421, or roughly $35 per month. Collision averages about $473 per year, near $39 per month. PIP pricing varies enormously by state and limit. Uninsured motorist bodily injury frequently costs between $50 and $150 per year. That is modest protection against a very real risk.
Claim severity explains why those premiums keep climbing. In 2024, the average collision claim reached $5,489. The average comprehensive claim was $2,306. More recent industry data puts the average collision claim near $5,992. Repair costs have risen roughly 14% to 16%, and auto body labor rates have climbed about 9%. Claim frequency has fallen, however, which partly offsets the severity spike.
| Coverage | What It Pays | Typical Annual Cost | Deductible? |
|---|---|---|---|
| Collision | Your vehicle damage after impact | ~$473 | Yes, $250–$1,000 |
| Comprehensive | Theft, hail, fire, flood, animal strikes | ~$421 | Yes, $250–$1,000 |
| PIP | Medical bills, lost wages, some services | $100–$800+ | Sometimes |
| MedPay | Medical bills only | $50–$120 | No |
| UM/UIM | Your injuries when the other driver can’t pay | $50–$150 | Varies |
Most first party insurance claims carry a deductible. You pay the first $500 or $1,000, and the insurer pays the rest. MedPay is the common exception, paying from dollar one with no copay. Typically, first party claims settle faster than liability claims because no fault investigation is required. Many carriers issue collision payments within 7 to 30 days of an approved estimate. Your insurer may later pursue the at-fault driver through subrogation and refund your deductible.
Why Uninsured Motorist Coverage Is Critical First Party Protection
The single strongest argument for first party insurance is the state of the uninsured driver problem. The Insurance Research Council reported that 15.4% of motorists were uninsured in 2023. Underinsured drivers added another 18.0%. Combined, the UM/UIM exposure rate reached 33.4%. In plain terms, roughly one in three drivers cannot fully pay for the damage they cause. Liability coverage does nothing for you in that situation.
Uninsured motorist coverage closes that gap. It is a first party claim filed against your own carrier. UMBI pays your injuries. UMPD pays your vehicle damage in states that offer it. However, these claims come with strict rules. Most policies include a consent-to-settle clause. If you accept a settlement from the at-fault driver without written permission from your insurer, you can void your entire UIM claim. Notice deadlines also apply, sometimes within 30 days of the crash.
How to Strengthen Your First Party Insurance Coverage
Start by reading your declarations page. It lists every first party insurance coverage you carry, with limits and deductibles printed line by line. If collision or comprehensive is missing, your vehicle damage is unprotected. Check whether UM/UIM limits match your liability limits. In most cases, matching them is the right call. Many state regulators require carriers to offer UM at your liability limit.
Next, look at your deductible. Raising a collision deductible from $500 to $1,000 typically cuts that premium by 15% to 30%. Only do it if you can absorb the larger out-of-pocket hit. Then review PIP or MedPay. Even in at-fault states, $5,000 of MedPay costs very little and covers copays and deductibles your health plan will not. For example, a $2,000 emergency room visit can be paid entirely by MedPay.
📋 Get Free Insurance Guides
Free · No spam · Unsubscribe anytime
Finally, document everything. After a loss, photograph the damage from multiple angles before any repair. Report the claim promptly, in writing if possible. Keep every medical bill and repair estimate. Ask your adjuster in writing whether your deductible will be recovered through subrogation. State insurance departments publish prompt-payment rules, and the NAIC auto insurance topic page explains how to escalate a disputed claim. If your insurer delays without explanation, file a complaint with your state department of insurance.
Frequently Asked Questions
Is first party insurance the same as no-fault insurance?
Not exactly, though they overlap. No-fault states require PIP, which is a form of first party insurance. However, collision and comprehensive are also first party coverages, and they exist in every state regardless of fault laws.
Does filing a first party claim raise my rates?
It can, but not always. Comprehensive claims for hail or theft typically have less rate impact than at-fault collision claims. In most cases, a single not-at-fault claim affects your premium far less than an at-fault one.
Can I use both first party insurance and sue the other driver?
Often yes, depending on your state. Your own insurer pays first, then seeks reimbursement from the at-fault party through subrogation. However, strict no-fault states limit lawsuits unless injuries meet a serious-injury threshold, so check your state’s rules before filing suit.
Compare Insurance Rates
Ready to see if you could be paying less? Compare quotes from top insurers in your area. Getting multiple quotes is the most effective way to find a better rate.
(paid link)
Official Sources & Resources
For verified information on auto insurance regulations and consumer protection:
- NAIC (National Association of Insurance Commissioners): naic.org
- Insurance Information Institute: iii.org
- Federal Trade Commission — Auto Insurance: consumer.ftc.gov
- USA.gov — Car Insurance: usa.gov/car-insurance
Content last reviewed September 2026. If you notice any outdated information, please contact us.