Los Angeles Claims Adjuster Property and Causality Practice Exam

What type of claims can be filed under policies such as Homeowners or Businessowners?

1. Only first-party claims

2. Only third-party claims

3. Both first and third-party claims

4. Neither first nor third-party claims

The correct answer is: Both first and third-party claims

Homeowners and Businessowners policies are designed to protect the insured from various types of risks and liabilities, allowing for flexibility in the claims process. These policies typically cover both first-party and third-party claims. First-party claims occur when the policyholder seeks coverage for their own losses or damages. For instance, if a homeowner's property is damaged by fire, they can file a first-party claim to recover the costs associated with repairing or replacing their property. Similarly, a business that suffers property damage from a natural disaster can file a first-party claim under its Businessowners policy to cover the associated repair costs. Third-party claims, on the other hand, arise when the policyholder is held liable for causing harm or damage to another individual or their property. For example, if a guest is injured on a homeowner's property, the homeowner's insurance may cover the medical expenses and legal fees associated with that injury, which constitutes a third-party claim. Likewise, a business might face a third-party claim if a customer is injured on their premises, and the Businessowners policy would provide coverage for those liabilities. This dual coverage is a critical aspect of homeowners and businessowners policies, ensuring that policyholders are protected against a range of risks they may face, both from personal loss