Third-Party Insurance Claims in California: Your Rights

Filing a claim against someone else's insurance company is a fundamentally different experience from filing under your own policy, and almost nobody is told why.

Under your own policy you are the insured. The carrier owes you contractual duties — to investigate, to act promptly, to deal with you in good faith. When you file against the other party's insurer, you are a third-party claimant. There is no contract between you and that company. It owes its duties to its own policyholder, and its financial interest is in resolving your claim for as little as possible.

That's not a scandal; it's the structure. But it changes what you should say, what you're obliged to provide, and how you should approach the whole thing.

First-party vs third-party, side by side

	First-party (your own insurer)	Third-party (their insurer)
Your status	Insured, party to the contract	Claimant, no contract
Their duty to you	Contractual duty of good faith and fair dealing	Duty runs to their insured
Recorded statement	Cooperation duty generally requires it	Not required. You may decline.
Medical records access	Limited to the claim	They will ask for a broad authorisation — do not sign a blanket one
Deductible	Applies	Doesn't apply
Speed	Usually faster	Slower — liability must be established first
Rate impact	Possible	None — it's not your policy
Bad faith	You may have a claim	Under Moradi-Shalal, a third party has no private right of action under Ins. Code §790.03

That last row is the one worth internalising. The California Supreme Court held in Moradi-Shalal v. Fireman's Fund that a third-party claimant cannot sue the other side's insurer directly for unfair claims practices. You can complain to the Department of Insurance, and the regulations still bind the insurer — but the enforcement route is regulatory, not a private lawsuit. Your remedy against the at-fault party remains, which is why the real leverage in a third-party claim is your ability to sue the person, not their carrier.

The five rules of a third-party claim

1. Do not give a recorded statement

You have no obligation to. The adjuster will ask early, framed as routine and helpful. The statement's purpose is to lock your account down in the first days — before you know the full extent of your injuries or damage — so it can be used against you later.

Provide the facts in writing instead: date, time, location, vehicles or property involved, what happened, and the police report number. That's cooperation without exposure.

2. Do not sign a blanket medical authorisation

If injuries are involved, the adjuster will send a broad medical release covering your entire history. Sign a narrow authorisation limited to treatment for this incident, or provide the records yourself.

3. Do not accept the first offer, or settle before you know the full extent

Early offers arrive before the full picture exists — before hidden vehicle damage is found, before you know whether an injury resolves in three weeks or eighteen months. A signed release ends the claim permanently, including for consequences that appear later. There is no reopening it.

4. Do not let their timeline be your timeline

Their carrier can slow-walk liability. Your statutes of limitation keep running regardless: two years for personal injury (CCP §335.1) and three years for property damage (CCP §338), from the date of the incident. Calendar both today.

5. Do not assume they will tell you about coverage that could pay you

Umbrella policies. Additional insureds. An employer's policy where the at-fault driver was working. None of these come up voluntarily.

Being handled by someone else's adjuster? TSM clients get us on the call. (209) 524-6366 Modesto · (530) 221-3031 Redding.

How the process actually runs

Report and claim number. Report the incident to the other party's insurer and get a claim number and an adjuster. Report it to your own insurer too, even if you don't intend to claim — most policies require notice, and your carrier can pursue the other side and recover your deductible through subrogation.

Liability investigation. The adjuster gathers statements, the police report, and photographs, then assigns fault. California uses pure comparative negligence: you can recover even if you were mostly at fault, reduced by your share. So an adjuster's "you were 30% responsible" is a negotiation position with a specific dollar consequence, not a verdict.

Damage evaluation. Property is estimated. Injuries are evaluated from medical records and bills, usually after treatment concludes or reaches a plateau.

Offer, negotiation, settlement, release. Read the release before signing. It is final.

The regulatory clock still applies. The Fair Claims Settlement Practices Regulations govern third-party claims too: 15 calendar days to acknowledge, 40 calendar days from proof of claim to accept or deny or explain the delay in writing. See the claim timeline and the deadlines that apply.

Your own policy may be the better route

This surprises people: filing under your own coverage is often faster and better, even when the other party is clearly at fault.

Collision coverage. Your carrier pays for your vehicle now, minus your deductible, then subrogates against the other insurer. When subrogation succeeds you get your deductible back. You get repaired in days instead of arguing for weeks.

Uninsured/underinsured motorist. If the other driver has no insurance, or has the state minimum against a much larger loss, this is your coverage — and California's UM/UIM minimums rose to $30,000/$60,000 alongside the liability increase on January 1, 2025. See uninsured motorist coverage.

MedPay. Pays medical bills regardless of fault, immediately, with no deductible. See MedPay in California.

The trade-off: you're paying a deductible up front and you may see a rate effect. What you get is speed and a company that actually owes you duties. For anything beyond a very simple claim, that's usually the better trade.

Building the third-party claim

Evidence — photographs of everything before repairs, the police or incident report, witness names and numbers, and dated notes. See documenting damage.

Property damage — two written repair estimates; diminished value where a newer vehicle is worth less post-repair even after proper repairs; rental costs while yours is out of service; towing and storage.

Injury — all medical records and bills, wage loss documentation from your employer, out-of-pocket costs including mileage to appointments, and a written record of how the injury affected daily activities.

A demand letter — a single organised package: facts, liability, medical summary, itemised damages, and your number. A well-built demand package changes the tone of a negotiation more than any phone call.

When to bring in a lawyer

Property-only claims with clear liability rarely need one. Get counsel involved when there are significant injuries, disputed or shared liability, a commercial vehicle or employer, a government entity (special claim-filing deadlines apply and they are much shorter), or where the offer doesn't come close to the documented damages.

If the third-party carrier denies liability outright, read if your claim is denied — and note that the escalation routes differ for third-party claimants: the CDI complaint at 1-800-927-4357 remains available, while direct bad-faith litigation against their carrier generally does not.

FAQs

What is a third-party insurance claim?

A claim you file against another person's or business's insurance policy for damage or injury they caused. You are a claimant, not an insured — the insurer's contractual duties run to its own policyholder.

Do I have to give a recorded statement to the other driver's insurance company?

No. You have no contractual obligation to a carrier you're not insured by. Provide the facts in writing instead.

How long do I have to file a third-party claim in California?

Report promptly. The legal deadlines are two years for personal injury (CCP §335.1) and three years for property damage (CCP §338); claims against government entities have much shorter deadlines.

Should I file through my own insurance or theirs?

Your own collision coverage is usually faster and your carrier subrogates to recover your deductible. Theirs avoids a deductible but is slower and adversarial.

Can I sue the other driver's insurance company for acting in bad faith?

Generally no. Under Moradi-Shalal v. Fireman's Fund a third-party claimant has no private right of action under Insurance Code §790.03. You can file a complaint with the CDI, and you retain your claim against the at-fault party.

Their adjuster isn't on your side. That's not personal — it's the structure.

TSM Insurance has represented Central Valley clients in exactly these conversations for 100 years. If you're dealing with someone else's insurance company, call us before you sign anything.

Modesto (209) 524-6366 · Redding (530) 221-3031 · Talk to a TSM advisor