Insurance bad faith is when an insurance company doesn’t live up to its end of the bargain with its customer, its policy holder. The only reason people buy insurance is to protect themselves if they get sick, if they’re in an accident, especially if they cause an accident. Insurance, another word for it is protection. Ask yourself, “Is the insurance company protecting the person who paid it money for that protection?” If the answer in your mind is you don’t think the insurance company is protecting the person who paid for it, then it could be a bad faith situation.