Bad Faith: First- and Third-Party Standards State Law Survey

Summary

This survey addresses state law on the insurance coverage issues of first- and third-party bad faith standards. The survey covers all 50 U.S. states and the District of Columbia. While most coverage issues start with examining whether a particular claim is covered under the terms and conditions of a certain insurance policy, in some instances, the insurance company's conduct in handling the insured's claim, or the process by which the insurer arrived at a determination that a claim is not covered, becomes the subject of a separate claim for damages. This additional aspect of the claims process is usually referred to under the general heading called "bad faith." Because first- and third-party bad faith address different risks for the insured, they are typically subject to different standards, and standards vary widely among the states.