Whether you are the victim of first-party or third-party bad faith depends on your relationship to the insurance provider. A first-party insurance claim refers to a claim filed with your own provider in pursuit of financial benefits for your injuries or losses. Thus, first-party bad faith refers to bad faith or unfair dealings by your own insurance company.
If you caused an auto accident in Arizona, for example, you would file a first-party claim with your own car insurance provider for financial reimbursement. If your own insurance carrier violates Arizona's insurance law or fails to treat you fairly and reasonably, may have grounds to file a first-party bad-faith lawsuit against your provider for compensation.