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After a March 2012 hail storm damaged his home in Mission, Texas, Kenneth Toney (“Toney”) filed a claim with State Farm Lloyds (“State Farm”), his homeowners insurance carrier.  The parties were unable to agree on the amount to which Toney was entitled for the claim.  Specifically, Toney believed he should receive approximately $9,000 to replace a portion of his roof with a different type of roof structure, an action that he believed was mandated by local building codes.  Following the storm, Toney received two letters from the city of Mission:  one indicating that the type of roof he had needed to be replaced under the building code; and a second which retracted the first and specified that, under the relevant code, the existing roof structure did not need to be replaced with a different type of structure unless such replacement was essential to making repairs.

Source: Fifth Circuit: If It Ain’t Broke, Not Paying To Fix It Ain’t Bad Faith