Who benefits from first-party insurance coverage?

First-party insurance coverage is designed to provide financial protection directly to the policyholder in the event of a loss or damage to their own property or person. This type of coverage allows the insured individual to file a claim and receive benefits that help cover losses such as property damage, theft, or medical expenses resulting from an accident in which they are involved.

The primary benefit of first-party coverage is that it supports the policyholder in managing the financial impact of unforeseen events, thereby ensuring their financial stability and peace of mind. For example, if a homeowner's property is damaged due to a fire, first-party insurance would cover the repair costs, allowing the homeowner to recover without facing significant financial burden.

In contrast, the insurance company profits from premiums paid by customers, while third-party claimants may benefit through liability coverage held by someone else. The insurance agent earns commission or fees related to policy sales but does not receive direct benefits from first-party coverage as it specifically serves the needs of the policyholder.