New York Independent General Adjuster Practice Exam 2026 – Complete Preparation Guide

First-party insurance refers specifically to policies that provide coverage for the policyholder’s own losses. This type of insurance is designed to protect the insured against financial losses directly related to their property or other personal assets. In the case of a claim, the policyholder receives payment directly from their insurer for covered damages or losses sustained, allowing them to repair or replace what has been lost or damaged.

Unlike third-party insurance, which provides coverage for claims made by someone else against the insured (such as in liability cases), first-party insurance focuses solely on the coverage and protection afforded to the individual policyholder. Examples of first-party insurance include homeowners’ insurance, auto insurance for physical damage to one’s own vehicle, and health insurance covering medical expenses.

The other options do not accurately reflect the definition of first-party insurance. For example, coverage for third-party liability pertains to protecting the insured against claims from others, while options referring to property damage only or universal coverage do not encapsulate the comprehensive nature of first-party insurance as it relates to direct losses incurred by the policyholder.