"Bad Faith" in Relation to Insurance

When an insurance company acts in "bad faith", it means that it is acting contrary to its agreement, or policy, with you. Bad faith insurance claims are filed for a variety of reasons: by denying claims that are legitimate for reasons unknown (or false), by delaying payment of claims, or by refusing to communicate with the insured. Just as you agreed to do certain things when you signed your policy, such as not submit false insurance claims, the insurance company must also hold up their end of the agreement by acting in "good faith" instead of "bad faith"