What is a bad faith insurance claim?

The insurance policy between you (Insured) and the insurance carrier (Insurer) is considered a contract. This contract requires that your Insurer act in "good faith" toward you. When the Insurer unreasonably withholds the benefits of the policy from it's Insured, it is considered to be in "bad faith". Basically, it is any claim that is wrongfully denied by the Insurer.