Alabama Insurance Adjuster Practice Exam

What type of claim will Flora file after damaging Cam's billboard?

1. A first-party claim

2. A third-party claim

3. A liability claim

4. A subrogation claim

The correct answer is: A first-party claim

In this scenario, Flora would be filing a third-party claim after damaging Cam's billboard. A first-party claim involves an insured party seeking compensation or benefits directly from their own insurance carrier for damages or losses that they have sustained. In contrast, a third-party claim pertains to a situation where one party seeks compensation from another party's insurance company for damages caused by the latter. Since Flora caused damage to Cam's property (the billboard), she would need to file a claim against Cam's insurance policy to cover the damages. This qualifies as a third-party claim because Flora is not seeking compensation from her own insurance, but rather from the insurer of the individual whose property she damaged. Liability claims typically refer to situations where one party seeks damages based on the negligence or wrongful act of another party. In this context, while Flora may be liable for the damage, the appropriate term for the claim she would file to seek recovery is a third-party claim. A subrogation claim is a bit different; it arises when an insurance company seeks reimbursement from a party that is responsible for damages after it has compensated its insured. This would not apply to Flora's situation directly, as her action follows the incident of damage rather than a pursuit of recovery after an insurer has compensated