The short answer to the question - Does bipolar disorder cause hallucinations - is yes it can but not for all individuals with this mental illness. I have bipolar disorder I and experience depression, hypomania, and mania. For me, hypomania is a heightened level of activity with racing thoughts but not as intense as mania. I do not encounter psychosis while hypomanic. When I am manic I often experience psychosis which is characterized by paranoia and auditory, visual, and olfactory hallucinations.
It can be very scary to undergo psychosis. In my experience the paranoia feels so real, it is hard for anyone to talk me out of believing the thoughts. A common feeling while paranoid is that "someone" is bugging my phone. I try not to use my iPhone at all when this occurs. I've been having the three types of hallucinations for two decades so when they come I can usually realize quickly that it is just a hallucination and I know that is just a symptom of my mania and that it is not real.
I always immediately contact my psychiatrist when experiencing psychosis. I usually use a landline as I am paranoid at the same time. It is very important that I share these symptoms with my psychiatrist and therapist as soon as possible. Typically my doctor increases the dose of my antipsychotic medicine during this time. It helps.
Although I experience psychosis in my journey with bipolar disorder not everyone who has bipolar disorder has these symptoms.
Take good care,
Don't forget to love yourself. -- Soren Kierkaguard