What distinguishes 'first-party' insurance from 'third-party' insurance?

The distinguishing feature of 'first-party' insurance is that it specifically covers the insured’s own losses. This type of insurance provides financial protection for losses that the policyholder incurs directly, such as damage to their own vehicle. In contrast, third-party insurance primarily offers coverage for damages that the insured is liable for towards another party, meaning it pays for the losses suffered by someone else due to the insured's actions.

This distinction is fundamental in understanding the overarching structure of motor insurance policies. First-party coverage is concerned with the insured's own property or personal injury claims, while third-party coverage is focused on reimbursing other individuals or entities affected by the insured's actions or negligence.

The other options do not accurately differentiate the two types of insurance in a meaningful way. For instance, while personal injury protection can be a component of certain policies, it is not what specifically defines third-party insurance. Also, it's important to note that cost comparisons between first-party and third-party insurance can vary widely based on several factors, including the specific insurance market, coverage limits, and risks involved.