In Strauss v. Farmers Insurance Exchange (1994) 26 Cal.App.4th 1017, the court emphasized that an insurer has a good faith duty to all of its insureds under a policy. In that case, the plaintiff made a policy limits settlement offer to the driver only. (Strauss, supra, 26 Cal.App.4th at pp. 1019-1020.) The insurer rejected the offer because it did not release the other two insureds and counteroffered "to settle for the policy proceeds in exchange for a release of all three insureds." (Id. at p. 1020.) After settling with the insureds and receiving an assignment of any claims against Farmers, the plaintiff sued the insurer, alleging it had acted in bad faith in rejecting the driver-only settlement offer. (Ibid.) The Strauss court explained the covenant of good faith and fair dealing requires "an insurer to make a reasonable effort to settle a claim against its insured within policy limits whenever there is a substantial likelihood of a recovery in excess of those limits. . . . An insurer who breaches this duty acts in bad faith and may be held liable for the entire amount of the judgment recovered against its insured, including any portion in excess of the policy limits." (Id. at p. 1021.) An insurer's duty, however, extends to all of its insureds. Accordingly, "an insurer may, within the boundaries of good faith, reject a settlement offer that does not include a complete release of all of its insureds." (Ibid.) The Strauss court thus rejected the bad faith claim, noting the insurer "would have acted in bad faith by accepting the offer, therefore it could not be held in bad faith for refusing it." (Id. at p. 1022.)