What defines a third party claim?

A third-party claim is defined as a claim filed against an insurance policy by an individual who is not a party to the insurance contract itself, meaning they are not the policyholder and they are not covered under that policy. In this scenario, the third party seeks compensation for damages or injuries they believe were caused by the policyholder or their actions.

For example, if a driver causes an accident, the injured party (who does not have a policy with the driver's insurance company) can submit a claim as a third party to seek damages for their injuries. This definition is crucial in understanding the dynamics of insurance claims, as it emphasizes the involvement of an outsider seeking redress under a policy that does not directly cover them.

The other choices refer to different types of claims or situations that do not accurately reflect the characteristics of a third-party claim. A claim made by a policyholder would be defined as a first-party claim, while a claim submitted by an agent refers to the intermediary making a request on behalf of a policyholder, which also falls outside the boundaries of a third-party claim. Lastly, a claim that is automatically approved touches on the process of claims handling, rather than the definition of a third-party claim itself.