The court denied the insurer’s motion to dismiss the insured’s claim for breach of the covenant of good faith and fair dealing, but granted the motion to dismiss the claim for declaratory judgment. Jimenez v. State Farm Fire & Cas. Co., 2026 U.S. Dist. LEXIS 182079 (D. Conn. Aug. 15, 2026).

The insured owned a two-family property which was insured by State Farm. After a fire damaged the property, the insured submitted a claim to State Farm. The policy provided for Fair Rental Value coverage “[w]hen a loss insured causes that part of the residence premises rented to others or held for rental by you to become uninhabitable.”

Before the fire, the insured alleged that he rented part of the property under an oral lease agreement. In support of his claim for Fair Rental Value, the insured alleged that he provided State Farm with bank deposit receipts demonstrating that he collected rent in cash. The insured further alleged that his rental ledger was destroyed in the fire.