Bad faith insurance seems like a complicated legal topic, but conceptually it is very simple. Bad faith insurance occurs when an insurance companies fails to act in accordance with the laws to which they are bound and when they fail to uphold their clients needs under the implied covenant of good faith. More simply, bad faith insurance just means that an insurance company didn't follow through on the promises they made in your policy, or they acted in an illegal manner.
Based on this, what are some examples of actions or behaviors that constitute bad faith insurance on the part of the insurer? One classic example is that the insurer fails to follow proper protocol for an individual's claim. Perhaps they didn't fully investigate your claim, or they denied your claim without telling you why they came to that decision.