The law of bad faith only applies to first party insurance contracts. In other words, only claims made by the insured against his or her own insurance company to which he or she is paying a premium for coverage are eligible. Thus, it applies to claims made by those who are insured against their own automobile insurance companies, homeowner’s insurance companies, disability insurance companies, etc. It does not apply to claims made by persons against another person’s insurance company because that other person injured or damaged the claimant in some way.
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