An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

The principle of good faith is foundational in insurance relationships, reflecting the expectation that both the insurer and the insured will deal fairly and honestly with each other. When an insurer fails to pay a legitimate claim that falls under the terms of the policy, it demonstrates a breach of this principle. Good faith obligates the insurer to uphold its end of the contract by providing the benefits outlined in the policy without unjust delay or refusal.

In this scenario, the insurer's neglect to fulfill its obligation undermines the trust inherent in the insurance agreement. It disregards the principle that both parties should act in mutual respect and integrity, thereby violating the good faith expectation that is central to insurance contracts. This principle is sometimes referred to as the "covenant of good faith and fair dealing," which is legally recognized in many jurisdictions and serves to protect policyholders from arbitrary or unfair practices by insurers.