Insurance bad faith is a legal term that describes the claim an insured person may have against an insurance company for its bad acts. Under the law of most jurisdictions in the United States, insurance companies owe a duty of good faith and fair dealing to the persons they insure.

If an insurance company violates that duty, the insured person has a claim against the insurance company in addition to any other claims. The result is that a plaintiff in an insurance bad faith case may be able to recover an amount larger than the original face value of the policy, if the insurance company's conduct was particularly egregious.